Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), certain group health plan participants who lose their coverage are permitted to continue coverage for a period of time by paying the premium themselves. The American Recovery and Reinvestment Act of 2009 (ARRA) provided a subsidy to certain eligible individuals for 65% of their COBRA premiums. ARRA was recently amended by the Department of Defense Appropriations Act of 2010 (DDAA), which made several significant changes to ARRA’s original COBRA subsidy—including extending the subsidy from 9 to 15 months, and allowing an additional two months for individuals to qualify for the subsidy. Katten recently published a Client Advisory discussing such changes in detail.
The DDAA amendments require plan administrators to issue notices to certain individuals about the COBRA subsidy, and DDAA’s changes thereto. To help plan administrators comply with DDAA’s updated notice requirements, the Department of Labor (DOL) has created three updated model notices, each of which is designed for a particular group of individuals and contains information to help satisfy the notice provisions added by DDAA.
The updated model notices include the General Notice, the Premium Assistance Extension Notice and the Alternative Notice. The General Notice should generally be used going forward, as it contains information regarding the COBRA subsidy, as well as information required in a COBRA election notice. The Premium Assistance Extension Notice should be provided to individuals who have already received a COBRA election notice that did not include information regarding the extended subsidy. The Updated Alternative Notice should be provided by insurance issuers that provide group health insurance coverage to persons who became eligible for continuation coverage under a state law. In each case, the notices may require edits to ensure their accuracy.
The DOL’s updated model COBRA subsidy notices can be found here.