On Dec. 19, 2009, Congress amended the American Recovery and Reinvestment Act of 2009 (ARRA), approving an extension of the eligibility period and duration of the COBRA premium subsidy for assistance eligible individuals (AEIs).
The amendment extended the COBRA premium subsidy eligibility period for two months — until Feb. 28, 2010 — and increased the maximum period for receiving the subsidy for an additional six months (from the old guideline of nine months to the new guideline of 15 months). In addition, individuals who had reached the end of their subsidy period now have the opportunity to obtain the subsidy for an additional six months.
New Notification Requirements
Notice to Individuals. Employers must provide notice of the extension to those individuals who, at any time on or after Oct. 31, 2009, but no later than Dec. 19, 2009:
- were assistance eligible individuals, or
- experienced a qualifying event related to a voluntary or involuntary termination of employment.
Employers must provide this written notice by Feb. 17, 2010.
Notice Upon Conclusion of Nine-Month COBRA Subsidy Period. Employers must also provide notice to assistance eligible individuals whose continuation coverage was discontinued after the expiration of their nine-month subsidy period (and prior to the new law taking effect on Dec. 19, 2009) due to a failure to pay the COBRA premium. This notice is required to advise them of their right to receive the subsidy for an additional six months if they pay the back premiums. If payment is made, their continuation coverage will be retroactively reinstated. To qualify for this reinstatement, the individual must pay the back premiums by Feb. 17, 2010, or within 30 days from the date the employer provides the updated COBRA premium subsidy notice, whichever is later. Employers must provide this notice within 60 days of the individual dropping coverage or first overpaying for such coverage.
Notice Upon Future Qualifying Events. The COBRA premium subsidy notices should be updated to incorporate these changes and should be distributed in the normal manner for all qualifying events that occur after Dec. 19, 2009.
Individuals who maintained their continuation coverage by paying the full COBRA premium after their subsidy expired are to be reimbursed for the amount of retroactive subsidy to which they are entitled under the new law. They employer may issue a refund directly to the individual or apply the overpayment against future premiums.
For more information, go to the U.S. Department of Labor’s Web page on COBRA Continuation Coverage Assistance Under ARRA.
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Originally posted 2010-01-25 13:51:48. Republished by Blog Post Promoter