Department of Labor Issues New Model COBRA Notices
On March 19, 2009, the Department of Labor issued four new model COBRA notices designed to help employers satisfy their new COBRA notice obligations under the American Recovery and Reinvestment Act. Under the Act, certain persons who lost health care coverage as a result of an involuntary termination of employment are entitled to a subsidy of 65 percent of the employee's cost of COBRA coverage.
(For more information regarding the Act and the COBRA subsidy, please refer to our Feb. 24, 2009, advisory bulletin, "New COBRA Rules Require Prompt Action." In addition, for your convenience, we've included a sound file of a Davis Wright Tremaine teleseminar, "How Will New COBRA Rules Affect You?" held on March 12, 2009.)
Before April 18, 2009, employers must distribute revised notices to qualified beneficiaries who have had a qualifying event under COBRA at any time from Sept. 1, 2008 through Dec. 31, 2009. Similar notices must be sent to persons who have had a qualifying event under a state's "mini-COBRA" continuation law during the same period.
To that end, the Department of Labor has issued the following four new model COBRA notices:
|
Notice |
Recipients |
|
Model General Notice (full version) |
Qualified beneficiaries who have not yet received a COBRA election notice and who have or had a qualifying event during the period beginning 9/1/08 through 12/31/09. |
|
Model General Notice (abbreviated version) |
Qualified beneficiaries who are currently enrolled in COBRA with qualifying events that occurred on or after 9/1/08. The notice advises them of the availability of the premium reduction. |
|
Model Notice in Connection with Extended Election Periods |
Qualified beneficiaries who: (i) have received a COBRA election notice; (ii) are not currently enrolled in COBRA; and (iii) who had a qualifying event during the period beginning 9/1/08 through 2/16/09. This includes persons who never elected COBRA, or who elected COBRA but subsequently discontinued it. The notice informs them about their extended COBRA election period and the availability of the subsidy. Note: The heading of this model notice is misleading—the Department of Labor has informed us that persons entitled to this notice are the qualified beneficiaries described in the above list, which includes qualified beneficiaries who are not, or may not be, eligible for the COBRA subsidy. |
|
Model Alternative Notice (for use by insurers) |
Qualified beneficiaries whose coverage is subject to a state's mini-COBRA continuation law and who lost or lose coverage during the period beginning 9/1/08 through 12/31/09. |
The model notices, which may be found at http://www.dol.gov/ebsa/COBRAmodelnotice.html, should be selected and then modified based on each qualified beneficiary's situation. They also may be used either to replace or supplement your existing COBRA notices. In addition, the model notices have options that an employer may choose to include or exclude, such as optional language relating to a qualified beneficiary's right to enroll in coverage that is different than the coverage in which he or she was enrolled at the time the qualifying event occurred.