COBRA Subsidy Extension: Revised Model COBRA Notices and Other Updated Information
In its ongoing effort to assist with COBRA subsidy compliance, the Department of Labor has just issued several documents that have been updated to reflect the extension of the COBRA subsidy eligibly period through May 31, 2010 (seeCOBRA Subsidy Extended….Again! from the April ’10 Benefit Beat). Included among these documents are new model notices, discussed below, Application for Expedited Review of Denial of COBRA Premium Reduction, Fact Sheet, and Frequently Asked Questions.
Revised Model Notices. The Department of Labor has provided the following five revised model COBRA subsidy notices:
- Updated General Notice. This notice must be provided to all individuals experiencing a qualifying event between September 1, 2008 and May 31, 2010 who haven’t already been provided a notice explaining the COBRA subsidy. As has been true since the enactment of the law, a COBRA qualifying event notice is only complete if it includes the COBRA subsidy explanation. This is true even if the qualifying event is not an involuntary termination from employment.
- Notice of New Election Period. This notice must be provided to individuals who experienced a reduction in hours between September 1, 2008 and May 31, 2010 followed by an involuntary termination of employment between March 2, 2010 and May 31, 2010. It must be provided to individuals who either elected COBRA and subsequently dropped it or did not elect COBRA at the time of the initial qualifying event.
- Supplemental Information Notice. This notice is to be provided to individuals currently on COBRA but who did not receive the subsidy explanation between March 2, 2010 and May 31, 2010. This is primarily targeting individuals whose qualifying events occurred between April 1, 2010 and April 14, 2010 who did not receive a COBRA election form including the subsidy information.
- Notice of Extended Election Period. This notice must be provided to individuals who experience a termination of employment between April 1, 2010 and April 14, 2010, were previously given notice that did not include subsidy information or either elected COBRA and subsequently dropped it or did not elect COBRA at the time of the initial qualifying event.
- Updated Alternative Notice.This notice is to be used by insurance issuers subject to state continuation laws. This document should be modified by the insurance issuer before it is used.
As is always the case with COBRA, compliance is very important. It is essential that affected individuals have the appropriate information with which to make informed decisions. The Department of Labor has provided many tools to facilitate this process.
Bills continue to wind their way through the halls of congress that could further extend the COBRA subsidy. Stay tuned for further developments.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.
As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.