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eTrends - The U.S. Department of Labor Today Released Four Model COBRA Notices

03.19.2009

The U.S. Department of Labor (DOL) today released four model COBRA notices to help group health plans and their participants comply with the COBRA premium reduction provisions added by the American Recovery and Reinvestment Act of 2009 (ARRA). The four model notices listed below are drafted to address specific ARRA changes applicable to particular groups of COBRA qualified beneficiaries and are intended to provide health plans and their administrators templates for customizing COBRA notices for their individual plans:

  1. A General Notice (Full Version) updating the DOL's prior model federal COBRA notice to incorporate the new COBRA premium reduction rights under ARRA and which may be adapted by group health plans for use as a general COBRA notice going forward for all qualified beneficiaries who experience a COBRA qualifying event through December 31, 2009 and have not previously received a COBRA election notice;
  2. A General Notice (Abbreviated Version) providing supplemental information about the new COBRA premium reduction and other ARRA rights without the general COBRA election information and which may be sent in lieu of the full version of the General Notice to those individuals who experienced a qualifying event under COBRA on or after September 1, 2008 and have both elected and are continuing COBRA coverage;
  3. A Notice in Connection with Extended Election Period summarizing the extended COBRA election period and subsidy provisions for participants experiencing a COBRA qualifying event from September 1, 2008 through February 16, 2009 who either did not elect COBRA coverage or who elected but subsequently discontinued COBRA coverage so that they are informed of the opportunity to receive an extended election period or make a "second election;" and
  4. An Alternative Notice for use by insurers and small group health plans exempt from federal COBRA rules but required to provide group continuation coverage under state continuation or "state mini COBRA" laws. 

As discussed in our earlier eTrends on the COBRA premium subsidy provisions under ARRA, group health plans face relatively quick deadlines for distributing the new notices and revising their COBRA forms. The notices informing individuals of the new COBRA premium subsidy and their rights to a second election must be sent no later than April 18, 2009. Individuals entitled to an extended election period have sixty (60) days from the date they receive the Notice to elect to enroll or "re-enroll" in COBRA. In order to reduce the chance of possible adverse selection among individuals receiving a second election notice, group health plans should send their extended election notices as soon as possible and not wait for the April 18, 2009 deadline.

For more information, please contact Jamison H. Hinkle

Employment, Labor and Human Resources

Employee Benefits and Compensation

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Smith Anderson publishes eTrends periodically as a service to clients and friends. The purpose of this eTrends is to provide general information about a significant legal development in the field of employment law. Readers should be aware that the facts may vary from one situation to another, so the conclusions stated herein may not be applicable to the reader’s particular circumstances.

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