DOL Issues Model COBRA Notices

The Department of Labor (DOL) has released on its website model Consolidated Omnibus Budget Reconciliation Act (COBRA) notices employers can provide to current and former employees as a means of complying with the notification mandates set forth in the American Recovery and Reinvestment Act of 2009 (ARRA), otherwise referred to as the stimulus package. ARRA, among other things, includes a provision that authorizes a 65 percent federal subsidy for continuing health care coverage under COBRA for employees who were involuntarily terminated between September 1, 2008 and December 31, 2009. Additionally, ARRA requires employers and plan sponsors to notify certain current and former plan participants and their beneficiaries about this reduction in health premium costs.

The notices include a General Notice (full version) which must be sent 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, and who either have not yet been provided an election notice or who were provided an election notice on or after February 17, 2009 that did not include the additional information required by ARRA. This full version of the General Notice includes information on the premium reduction as well as information required in a COBRA election notice. An abbreviated General Notice may be sent in lieu of the full version to individuals who experienced a qualifying event on or after September 1, 2008, have already elected COBRA coverage, and still have it. This version includes the same information as the full version regarding the availability of the premium reduction and other rights under ARRA, but does not include the COBRA coverage election information.

The DOL has also made available an Alternative Notice which insurance issuers that provide group health insurance coverage must send to individuals who became eligible for continuation coverage under a state law. Since state laws vary on this subject, issuers are advised to modify it as necessary.

Finally, 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: (a) had a qualifying event at any time from September 1, 2008 through February 16, 2009; and (b) either did not elect COBRA continuation coverage, or who elected it but subsequently discontinued COBRA. This notice includes information on ARRA’s additional election opportunity, as well as premium reduction information. This notice must be provided by April 18, 2009.

Fact sheets, posters and fliers on ARRA’s impact on COBRA are also available at the DOL’s website.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.