The Department of Labor's Employee Benefits Security Administration (EBSA) has created a procedure to assist employees who wish to appeal the denial of their COBRA premium assistance as amended by the American Recovery and Reinvestment Act of 2009. The appeal can be made online or by hard copy and submitted to the U.S. DOL. For the link to the online application, please CLICK HERE. Although no specific timeframe has been given, it appears that a ruling in the appeals process is to be within 15 days from receipt of the application. The DOL estimates 95,000 individuals will file an appeal.

HOW DOES THIS AFFECT YOU AS AN EMPLOYER?
It is important for employers to review their forms and provide detailed explanations when they intend to deny the subsidy. Employers may be requested to submit documents to the DOL for its review of the denial.

Employers must be very careful with determining when to deny a COBRA subsidy. The U.S. DOL advises that the two reasons to deny the subsidy are termination due to gross misconduct (as outlined under COBRA) and voluntary termination. If an employer informs an employee that they are eligible for the COBRA subsidy, and it is later determined that the individual is not eligible, penalties will apply. In this circumstance, the employer would not be able to recover the 65 percent not paid by an employee; and an employer will also be liable for additional penalties for underpayment of payroll taxes.

WHAT SHOULD I DO NEXT?
The form for employers to submit documents to the DOL for the denial review is available HERE.

As discovered, Corporate Synergies will continue to release information on any new benefits-related guidance or legislation regarding ARRA.

If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or click here to contact us today.

This alert is a legislative update designed to help you administer your employee benefits program and is not legal counsel. Please consult with an attorney for legal advice.