On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act (“ARRA”). ARRA provides a 65% government-funded COBRA premium subsidy for all eligible employees who have been or will be involuntarily terminated from employment between September 1, 2008 and December 31, 2009. Among other requirements, ARRA requires employers to contact involuntarily terminated employees and offer a “second chance” to enroll in COBRA coverage.
If an employee was involuntarily terminated from employment between September 1, 2008 and February 17, 2009 and the employee either (1) failed to enroll for COBRA coverage or (2) enrolled for coverage but had the coverage terminated for failure to pay the premiums, the employee (spouse and children) must be given a second chance to enroll for COBRA coverage and take advantage of the premium subsidy.
The DOL has provided model COBRA notices. Employers are required to ensure that these special election period notices are provided to employees and their qualified dependents no later than April 18, 2009.