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Total Articles: 8

Employees suspended without pay may be entitled to COBRA notice.

The Comprehensive Omnibus Budget Reconciliation Act of 1986 (COBRA) – part of the Employee Retirement Income Security Act (ERISA) – imposes an obligation on a healthcare coverage plan administrator to notify any employee covered by the administrator’s plan of that employee’s right to continue health insurance coverage for up to 18 months after a "qualifying event."

New Model COBRA Notice Available

As most employers know, employers offering group health insurance and employing twenty or more employees must allow terminated employees, spouses, and beneficiaries the option to continue their coverage at the group rate under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

A Snake in the Grass No More? DOL Proposes New COBRA Forms

As part of its continuing efforts to update the sleepier corners of the employee benefits world to conform to the Patient Protection and Affordable Care Act (ACA), the U.S. Department of Labor (DOL) recently proposed new regulations of the Consolidated Omnibus Budget Reconciliation Act (COBRA) that likely herald more frequent adjustments to the model notice and election forms we all know and love. While employers have been and will continue to be free to craft customized COBRA notices, the new model notices supplied by the DOL offer a helpful leg up for the drafting process. They also provide employers with a safe harbor that is deemed to capture the substantive content mandated by COBRA.

COBRA Subsidy Extended; Department of Labor Issues Revised Model Notices.

On December 19, 2009, President Obama signed the 2010 Department of Defense Appropriations Act. Included in this Act was an extension of the length and availability of the 65% premium subsidy provided to COBRA participants under the 2009 stimulus act (the American Recovery and Reinvestment Act or “ARRA”). (For information regarding the original COBRA subsidy, please see our previous E*Bulletins from March 2009 and February 2009).

New COBRA Guidance (and Model Notices) from the DOL.

Employers scrambling to comply with the COBRA premium assistance and second-chance election provisions of the American Recovery and Reinvestment Act of 2009 (also referred to as the “federal stimulus bill”) have some useful guidance in the form of eagerly-awaited model notices and other informal guidance from the Department of Labor (DOL).

Stimulus Package Affects COBRA Notices.

Yesterday, the U.S. Labor Department (DOL) released model notices regarding the new COBRA requirements that were enacted as part of the American Reinvestment and Recovery Act of 2009 (ARRA). The law mandates that plans notify certain current and former participants and beneficiaries about the COBRA premium subsidy and "second chance" COBRA election opportunity by no later than April 18, 2009.

DOL Issues Model Notices for "Second Chance" COBRA Election and Subsidy.

On March 19, 2009, the U.S. Department of Labor (“DOL”) issued several model notices to cover a variety of COBRA situations impacted by the American Recovery and Reinvestment Act (the recent stimulus law). First and foremost, employees who were involuntarily terminated on or after September 1, 2008, and who are not currently covered under COBRA, may have a second chance to elect COBRA. They must be notified of their new COBRA rights and the new 65% COBRA subsidy by April 18, 2009. The DOL has provided a model notice for that purpose. Employers should provide such notice as soon as possible because former employees have 60 days from the date the notice is provided to exercise their second chance election rights, and employers will want to start the clock running.

Department of Labor Issues Model Notices for Subsidized COBRA Premiums

President Obama on Feb. 17, 2009, signed into law the American Recovery and Reinvestment Act of 2009 (the “ARRA”). The ARRA expands the rights of terminated employees and their eligible beneficiaries under the Consolidated Omnibus Budget and Reconciliation Act of 1985, as amended (“COBRA”). Specifically, the COBRA provisions of the ARRA provide that 65 percent of an assistance eligible individual’s COBRA premiums will be subsidized by the U.S. government. While the employer or other plan sponsor is initially required to front the cost of the subsidy, the government will reimburse the entity by providing it with a credit against its payroll taxes and/or a refund.