E-Newsletter

March 2009

As April 18, 2009 Deadline Approaches, DOL Issues Model Notices Regarding COBRA Premium Subsidies

Keith E. Kopplin, Esq.

As mandated by Congress, the Department of Labor has issued eagerly awaited model notices for use by employers implementing the temporary COBRA premium subsidy provisions of the American Recovery and Reinvestment Act of 2009 (ARRA). These four notices cover separate categories of individuals:

1. Model General Notice (full version) - a 13 page notice to be used for qualified beneficiaries who have not yet received a COBRA election notice and who have qualifying events occurring during the period that begins with September 1, 2008 and ends with December 3, 2009;
   
   
2. Model General Notice (abbreviated version) - an 8 page notice to be used for qualified beneficiaries currently enrolled in COBRA coverage with qualifying events that occurred on or after September 1, 2008 to advise them of the availability of the new premium reduction;
   
   
3. Model Alternative Notice - an 11 page notice for Wisconsin employers who have less than 20 employees (and are, therefore, not covered by federal COBRA), but who are still eligible for the federal subsidy during the time the employee and qualified beneficiaries are eligible under Wisconsin health insurance continuation insurance law; and
   
   
4. Model Notice in Connection with Extended Election Periods - a 12 page notice to use for qualified beneficiaries who are or who would be an Assistance Eligible Individual (AEI) but who are not enrolled in COBRA coverage, including those who never elected and those who elected but then subsequently discontinued coverage, with qualifying events that occurred during the period from September 1, 2008 through February 16, 2009.

Employers have only until April 18, 2009 to distribute applicable notices and to ensure compliance with the new COBRA requirements of ARRA. There are significant penalties for employers who are not in compliance. Employers will need to take the following steps between now and then:

1. Determine who is eligible for which notices and a premium subsidy;
   
   
2. Determine who is eligible for a second election notice period;
   
   
3. Decide whether the employer will allow employees to re-enroll in coverage that is different from the coverage in which the individual was enrolled at the time the qualifying event occurred;
   
   
4. Customize the model COBRA notices with the following information: name and address of the employer's contact person; whether the employer will allow employees to enroll in alternative coverage; provide blanks where the date of notice, months of COBRA eligibility for each employee, identity of qualifying beneficiaries by name, and premium cost can be added to each form.
   

Krukowski & Costello, S.C. will be presenting two audio programs discussing the most important questions regarding the new COBRA provisions of the ARRA. Please join us on March 28 or April 14 to make sure that you are in compliance. Click here for more information or contact Krukowski & Costello, S.C.'s educational services department at (414) 988-8400.


More information is also available under Legal News.