PRESIDENT OBAMA SIGNS COBRA EXTENSION

Posted on March 3, 2010 by Daniel Burnick

On March 2, 2010, President Obama signed into law the Temporary Extension Act of 2010 which addresses the COBRA subsidy and extends the time employees may file for Federal Emergency Unemployment Compensation.  Under COBRA, the new law extends coverage for those involuntarily terminated from March 1 through March 31, 2010, the eligibility period for the 15 month, 65 percent premium subsidy.  It also permits employees to receive the subsidy if they initially lost their group coverage to to a reduction in work hours and then were terminated after the enactment of this bill.  The law also extends the time period during which terminated employees may file for Federal Emergency Unemployment Compensation from February 28 to April 5, 2010, and extends the time period during which they may claim and be paid emergency unemployment compensation from July 31 to September 4, 2010. 

Practice pointer.  Congress is still considering legislation to  extend these programs through 2010.  Since these benefits were due to expire, and Congress could not agree on a longer term extension, this short term extension was passed so Congress can continue to explore a longer term extension. 

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DEPARTMENT OF LABOR ISSUES UPDATED MODEL COBRA NOTICES

Posted on January 21, 2010 by Daniel Burnick

The Department of Labor released 3 model notice packages to help group health plans and employers provide notice on the availability of the extension of COBRA continuation coverage under the American Recovery and Reinvestment Act.  The American Recovery and Reinvestment Act was amended by the Department of Defense Appropriations Act of 2010 and extended the eligibility period for 2 months and the duration from 9 to 15 months.  Eligible individuals pay only 35% of their COBRA premiums, and the remaining 65 percent is reimbursed to the employer through a tax credit.  According to Phyllis C. Borzi, assistant secretary of the Labor Department's Employee Benefits Security Administration, "Our action today gives workers and their families useful information to keep important health benefit coverage during these challenging economic times.  We also are making it easy for employers and plans to meet their obligations to provide the notices".  The Department of Labor will be holding a free webcast on January 22, from 1 to 3 p.m (EST) to help employers, plan administrators and service providers comply with the notice requirements.  You can register on line at www.dol.gov/cobra or call Sandra Lynch at 202-693-8671.

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COBRA MODEL NOTICES ISSUED BY DOL

Posted on March 19, 2009 by Daniel Burnick

On March 19, the Department of Labor issued their model notices for COBRA as part of the American Recovery and Reinvestment Act of 2009 which was passed last month by Congress.  The forms applicable for COBRA Continuation Coverage Assistance under the Act are available on the DOL website.  The 4 separate notices are designated as general notice (full version), general notice (abbreviated version), alternative notice and notice in connection with extended election periods.  All COBRA eligible employees, and their qualified beneficiaries, involuntarily terminated between September 1, 2008, and December 31, 2009, qualify for the 65% subsidy on COBRA premiums.  Former employees who elect to use the subsidy are responsible for 35% of the premium, and the employer is responsible for the other 65%, which will be recovered as a credit against their quarterly payroll taxes. 

Practice Pointer.  Employers are required to give notice to employees of the available subsidy (and have been required since February 17, 2009) and the employee and qualified beneficiaries have 60 days to decide whether to sign up for the subsidized COBRA program. 

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