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Recovery Act Model COBRA Notices Posted

Melissa Klein Aguilar | March 25, 2009

The Department Of Labor has published four model notices for group health plans to notify certain current and former employees and beneficiaries about health care continuation coverage and premium reductions as required by the American Recovery and Reinvestment Act of 2009.

Group health plans subject to the Consolidated Omnibus Budget Reconciliation Act [COBRA] continuation provisions are subject to the Recovery Act’s premium reduction provisions, notice requirements, and an additional election period. Health insurance issuers who are required by state law to provide comparable continuation coverage are also subject to the Recovery Act’s premium reduction provisions and notice requirements, but not the additional election period.

There are four model notices available on the Employee Benefits Security Administration’s dedicated COBRA Web page.

A General Notice for plans subject to the Federal COBRA provisions. Those plans must send notice to all qualified beneficiaries, not just covered employees, who experienced a qualifying event at any time from Sept. 1, 2008 through Dec. 31, 2009, regardless of the type of qualifying event, AND who either haven’t yet been provided an election notice or who were provided an election notice on or after Feb. 17, 2009 that didn’t include the additional information required by the Recovery Act.

An abbreviated General Notice that includes the same information as the full version regarding the availability of the premium reduction and other rights under the Recovery Act, but doesn’t include the COBRA coverage election information. It may be sent in lieu of the full version to individuals who experienced a qualifying event during on or after Sept. 1, 2008, have already elected COBRA coverage, and still have the coverage.

An Alternative Notice that insurance issuers that provide group health insurance coverage must send to persons who became eligible for continuation coverage under a State law. Since continuation coverage requirements vary, the DoL notes that issuers should modify the model notice as necessary to conform it to the applicable State law. The DOL notes that tje model Alternative Notice or the abbreviated model General Notice may also be appropriate for use in certain situations.

Plans subject to the Federal COBRA provisions must send a Notice in Connection with Extended Election Periods to any assistance eligible individual (or any individual who would be an AEI if a COBRA continuation election were in effect) who 1. Had a qualifying event at any time from Sept. 1, 2008, through Feb. 16, 2009; and 2. either didn’t elect COBRA, or who elected it but subsequently discontinued COBRA. This notice must be provided by April 18.

An alert from Pillsbury Winthrop Shaw Pittman notes that, for qualified beneficiaries whose qualifying event occurred on or after Sept. 1, 2008, the Recovery Act provides that their COBRA election period won’t end until 60 days after they receive a complete notice of COBRA rights, including the availability of the premium subsidiary available under the Recovery Act.

Consequently, Pillsbury Partner Howard Clemons writes, “Plans need to immediately begin using an updated form of COBRA notice in order to start the 60-day COBRA election period. All qualified beneficiaries, not just the former employee, must receive the updated notice.”