E-Newsletter

June 2009

COBRA Subsidy Update: DOL Issues Application for Expedited Review

Keith E. Kopplin, Esq.

More than three month ago, President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA) into law. Among its provisions, ARRA made temporary, but significant, modifications to the Consolidated Omnibus Budget Reconciliation Act (COBRA) rules regarding the continuation of group health insurance coverage, including the provision of a second election opportunity and 65% subsidy for certain individuals. [For more details, see K&C E-Newsletters from February 2009 and March 2009.]

On May 22, 2009, the Department of Labor (DOL) posted one of the final pieces to this puzzle on its website: the Application for Expedited Review of Denial of Cobra Premium Reduction. [Click here for a copy.] This form, which can be submitted online, by facsimile, or by mail, is for use by individuals (former employees or their dependents) who believe their COBRA rights have been improperly denied. Although the DOL was directed to develop and implement this review process as part of the COBRA subsidy provisions of ARRA, its Application for Expedited Review is broad enough to address basic COBRA coverage issues as well. To that end, all employers should familiarize themselves with this form, and be prepared to address possible inquiries from the DOL regarding the COBRA rights of former employees and their beneficiaries - including those who may have first become eligible for COBRA as early as September 2008.

Including instructions, the DOL's Application for Expedited Review is eleven pages long. Among the ten separate eligibility questions, applicants are asked whether they received notice of their right to elect COBRA, whether they received notice of their right to a premium reduction, and whether there was an involuntary termination of employment. Regarding this last question, reference is made to IRS Notice 2009-27, which provided a number of examples when it appeared to be a voluntary termination but was treated as involuntary for purposes of the COBRA subsidy provisions of ARRA. Applicants are also instructed to attach any and all documentation they believe would aide the DOL in making its determination. According to the DOL, such documentation could include the applicant's:

• COBRA election notice,
  
• Request for Treatment as an Assistance Eligible Form or other form used to request the premium reduction,
  
• Insurance card,
  
• Payroll stubs showing deductions for health benefits,
  
• Any documents detailing the date and circumstances of the termination of the employee's employment, or
  
• Any documentation the applicant was provided regarding the denial of the premium reduction.
  

Upon receipt of an individual's Application for Expedited Review, and all supporting documentation, the DOL is required by ARRA to make a determination within fifteen days.

For more information contact Krukowski & Costello, S.C.'s educational services department at (414) 423-1330.