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New COBRA Notices are Here!
Posted: Thursday, January 14, 2010
The COBRA subsidy program under the American Recovery and Reinvestment Act (ARRA) was extended December 19, 2009 under the Department of Defense Appropriations Act, 2010 (2010 DOD Act). The maximum subsidy period is now 15 months (previously nine), and the subsidy will now apply to involuntary terminations through February 28, 2010 (previously through December 31, 2009).
Yesterday, the Department of Labor (DOL) released three new model notices for employers to assist them in notifying terminated employees of the subsidy program. The updated notices reflect the new subsidy period and the deadline for becoming eligible to receive the subsidy; they should immediately replace the earlier versions of these notices.
In addition to the two updated General Notices (one for employers subject to federal COBRA rules, and an Alternative Notice for employers subject to state-mandated continuation coverage), the DOL also released a special Premium Assistance Extension Notice. The table below outlines the notification requirements for employers through February 28, 2010.
NOTICE |
WHO SHOULD RECEIVE NOTICE |
WHEN NOTICE MUST BE SENT |
Updated General Notice
(for use for plans subject to federal COBRA rules) |
- Individuals terminated December 19, 2009 through February 28, 2010.
- Individuals terminated between October 31, 2009 and December 19, 2009 who have not already received a COBRA Notice.
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Within the normal COBRA notice deadlines.
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Updated Alternative Notice
(for use for plans subject to state-mandated continuation coverage requirements) |
- Individuals terminated December 19, 2009 through February 28, 2010.
- Individuals terminated between October 31, 2009 and December 19, 2009 who have not already received an Alternative General Notice.
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Within the normal state-mandated deadlines.
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| Premium Assistance Extension Notice |
- Individuals who were terminated on or after October 31, 2009 (including those who did not elect COBRA, or those who dropped coverage when their nine-month subsidy period ended).
- Individuals in their “transition period” who exhausted their original nine-month subsidy period before the 2010 DOD Act extension.
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- By February 17, 2010; or
- For individuals in their “transition period”, the notice must be sent within 60 days from the start of the individual’s “transition period” (The transition period begins immediately after the end of the original nine-months of premium reduction in effect under ARRA.).
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Note: Some individuals may be entitled to multiple notices. To satisfy the notice requirements, these individuals may be provided a single notice that includes all of the required information so long as the notice is provided by the earliest date required.
Please note that this might not be the final extension of the subsidy program. It is possible that the subsidy will be extended through June 30, 2010. Benefits & Incentives Group will continue to provide updates as we receive them.
To access the new notices, go to http://www.dol.gov/ebsa/COBRAmodelnotice.html.
For additional information and resources, including a Premium Reduction Fact Sheet, go to http://www.dol.gov/ebsa/cobra.html, or contact your Benefits & Incentives Group representative.
For the initial BIG Update on the 2010 DOD Act, click here.
The information in this update should not be considered as tax or legal advice. Further counsel should be directed to your tax or legal advisor or the proper governmental regulatory agency.
If you have questions regarding this Update, please contact your Benefits & Incentives Group representative at
(303) 750-6200.
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