ARRA (American Recovery & Reinvestment Act of 2009) mandates that employers (plans) notify certain current and former healthcare participants and beneficiaries about an additional COBRA election opportunity, as well as COBRA premium reduction information.

HOW DOES THIS AFFECT YOU AS AN EMPLOYER?
COBRA provides certain former employees, retirees, spouses, former spouses and dependent children the right to temporary continuation of health coverage at group rates. COBRA generally covers health plans maintained by private-sector employers with 20 or more full and part-time employees. It also covers employee organizations or federal, state or local governments. It does not apply to certain religious entities and organizations. The new COBRA provisions also apply to insurers required to offer continuation coverage under state law similar to the federal COBRA.

WHAT SHOULD I DO NEXT?
New notices must be sent by April 18, 2009 to certain eligible individuals.  This eAlert helps employers with the new requirements and provides sample language to use (if their COBRA administrator is not currently assisting with the mailing).

The Department of Labor has released model notices to help plans comply with these requirements. Each model notice is designed for a particular group of qualified beneficiaries and contains information to help satisfy ARRA’s notice provisions.

Click here for the DOL’s Announcement of the Availability of Model Notices (PDF of full-text)

• General Notice (Full version)
  Plans subject to the Federal COBRA provisions must send the “General Notice” to all qualified beneficiaries, not just covered employees, who experienced a qualifying event at any time from September 1, 2008 through December 31, 2009, regardless of the type of qualifying event. This full version includes information on the premium reduction as well as information required in a COBRA election notice.
• General Notice (Abbreviated version)
  This version of the “General Notice” does not include the COBRA coverage election information, but still contains the same information as the full version regarding the availability of the premium reduction and other rights under ARRA.  It may be sent in lieu of the full version to individuals who experienced a qualifying event during on or after September 1, 2008, have already elected COBRA coverage, and still have it.
• Alternative Notice
  Insurance issuers that provide group health insurance coverage must send the Alternative Notice to persons who became eligible for continuation coverage under a State law. Continuation coverage requirements vary among States, and issuers should modify this model notice as necessary to conform it to the applicable State law. Issuers may also find the model Alternative Notice or the abbreviated model General Notice appropriate for use in certain situations.
• Notice in Connection with Extended Election Periods
  Plans subject to the Federal COBRA provisions must send the “Notice in Connection with Extended Election Periods” to any Assistance Eligible Individual (or any individual who would be an Assistance Eligible Individual if a COBRA continuation election were in effect) who:
  1. Had a qualifying event at any time from September 1, 2008 through February 16, 2009; and
  2. Either did not elect COBRA continuation coverage, or who elected it but subsequently discontinued COBRA.

More information about COBRA payments and the new law is available on www.dol.gov. 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.