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Employment Law Blog

Wednesday, April 28, 2010

DOL Publishes Updated Model Notices for Extended COBRA/ARRA Subsidy

Submitted by:
Christopher W. Olmsted, Esq.
Barker Olmsted & Barnier, APLC

The Department of Labor’s Employee Benefits Security Administration COBRA page now has available updated Model Notices, Application for Expedited Review of Denial of COBRA Premium Reduction, Fact Sheet, and Frequently Asked Questions (FAQs) that reflect the provisions of the Continuing Extension Act of 2010. They are available at http://www.dol.gov/COBRA.  The new model notices include the recently extended eligibility deadline of May 31, 2010. The model notices may be adapted by employers and health plans to provide notice to ARRA eligible terminated employees.

General Summary of Subsidy:

The American Recovery and Reinvestment Act of 2009 (ARRA), as amended, provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee’s employment. The involuntary termination must generally occur during the period that began September 1, 2008 and ends on May 31, 2010. (An involuntary termination of employment that occurs on or after March 2, 2010 but by May 31, 2010 and follows a qualifying event that was a reduction of hours that occurred at any time from September 1, 2008 through May 31, 2010 is also a qualifying event for purposes of ARRA.) The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months. (Source: DOL website)

 

Posted by Christopher W. Olmsted on 04/28 at 01:12 AM
COBRAEmployment Law