|
COBRA allows certain people to extend employer-provided group
health coverage, if they would otherwise lose the coverage due to certain events
such as loss of a job. The stimulus package, which was enacted in February 2009
as the American Recovery and Reinvestment Act of 2009 (ARRA), temporarily
reduces the premium for COBRA or comparable State continuation coverage for
eligible individuals. The Department of Defense Appropriations Act, 2010 (2010 DOD
Act) was signed by the President on December 19, 2009. The 2010 DOD Act amended
ARRA to extend the period to qualify for the COBRA premium reduction until
February 28, 2010 and the maximum period for receiving the subsidy an additional
six months (from nine to 15 months).
|
|
Individuals who are eligible for COBRA coverage because of their own or a
family member's involuntary termination from employment that occurred during the
period from September 1, 2008 through February 28, 2010 and who elect COBRA may
be eligible to pay a reduced premium. Eligible individuals pay only 35% of the
premium for COBRA coverage under their plans for up to 15 months. This premium
reduction is generally available for continuation coverage under the Federal
COBRA provisions, as well as for group health insurance coverage under
comparable State continuation coverage laws. (See FAQ #10).
Individuals who have reached the end of the original premium reduction period
will have additional time to pay extension-related reduced premiums that were
due prior to notice being provided.
An individual’s “transition period” is the period that begins
immediately after the end of the maximum number of months (generally nine) of
premium reduction available under ARRA prior to its amendment. An individual is
in a transition period only if the premium reduction provisions would continue
to apply due to the extension from nine to 15 months and they otherwise remain
eligible for the premium reduction. Individuals in a transition period must be
provided notice of the extension within 60 days of the first day of their
transition period. The notice must include information on the extension from
nine to 15 months and the ability to make retroactive payments for certain
unpaid reduced premiums. The transition period may include multiple periods of
coverage. The retroactive payment(s) for the period(s) of coverage must be made
by the later of February 17, 2010, 30 days from when the notice was provided, or
the end of the otherwise applicable payment grace period.
Yes, as long as you otherwise remain eligible for the premium
reduction program. The law has a retroactivity provision, but 35% of the premium
must still be paid for each month for coverage to remain in effect. Individuals
who now have additional months of reduced premiums available (because the 2010
DOD Act extended ARRA’s maximum period from nine to 15 months and they
otherwise remain eligible for the premium reduction) are in a “transition
period” and will have additional time to pay certain unpaid reduced premiums
related to the extension. Accordingly, to continue their coverage, individuals
described above must pay 35% of the full premium for the December and January
periods of coverage by the later of February 17, 2010 or 30 days after notice of
the extension is provided by their plan administrator.
ARRA, as amended by the 2010 DOD Act, entitles individuals to pay
reduced premiums for the six months immediately following the initial nine
months (assuming continued eligibility for the premium reduction program).
Individuals who paid the full 100% premium in December should contact their plan
administrator, employer sponsoring the plan, or insurance issuer to discuss the
refund or credit against future payments they are entitled to under the
amendment.
The new provisions require that notice of changes made to the
premium reduction program be provided within 60 days of the first day of your
“transition period.” The “transition period” begins with the first day
of the first period of coverage that would be eligible for the premium reduction
because of the 2010 DOD Act extension (in this case, December 1, 2009). If you
have not made the December payment, to continue your coverage you need only pay
35% of the full premium by the later of February 17, 2010 or 30 days after
notice of the extension is provided by your plan administrator.
If you paid the full 100% premium in December you should contact your plan
administrator or employer sponsoring the plan or insurance issuer to discuss a
refund or credit against future payments.
Yes, as long as you otherwise remain eligible for the premium
reduction program. If you did not pay for December, but pay the 35% of the full
premium by the later of February 17, 2010 or 30 days after the notice of the
extension is provided by the plan administrator, coverage will be retroactive
and will cover health care costs that occurred in December.
You will be eligible to pay reduced premiums for up to six more
months for a total of 15 months as long as you otherwise remain eligible for the
premium reduction program. Reasons for losing eligibility include becoming
eligible for other group health plan coverage or reaching the end of your COBRA
continuation coverage.
No. You will automatically be eligible to pay reduced premiums for
up to six more months for a total of 15 months as long as you remain eligible
for the premium reduction program.
No. An assistance eligible individual who pays the reduced premium
pursuant to ARRA, as amended, must be treated by the plan as having paid the
full premium.
The COBRA premium reduction provisions apply to all group health
plans sponsored by private-sector employers or employee organizations (unions)
subject to the COBRA rules under the Employee Retirement Income Security Act of
1974 (ERISA) and the Internal Revenue Code. They also apply to plans sponsored
by State or local governments subject to the continuation provisions under the
Public Health Service Act, and plans in the Federal Employee Health Benefits
Program (FEHBP). The premium reduction is also available for group health
insurance that is required by State law to provide comparable continuation
coverage (such as some “mini-COBRA” laws).
ARRA makes the premium reduction available for "assistance
eligible individuals." An Assistance Eligible Individual is a COBRA
qualified beneficiary who meets the following requirements:
-
Has a qualifying event for continuation coverage under COBRA or a State
law that provides comparable continuation coverage (for example, so-called “mini-COBRA”
laws) that is the employee’s involuntary termination during the period
beginning September 1, 2008 and ending February 28, 2010 ; and,
-
Elects continuation coverage timely.
Note: Those who are eligible for other group health coverage (such as a
spouse's plan) or Medicare are not eligible for the premium reduction.
If the plan determines that you are not eligible for the premium
reduction, you can request an expedited review of the denial. The Department of
Labor will handle requests related to private sector employer plans subject to
ERISA’s COBRA provisions. The Department of Health and Human Services will
handle requests for Federal, State, and local governmental employees including
public schools, public colleges and universities, or a police or fire
department, as well as requests related to group health insurance coverage
provided pursuant to state continuation coverage laws. The Departments are
required to make a determination regarding your request within 15 business days
after receiving your completed application for review.
Note: Appeals to the Department of Labor must be submitted on the U.S.
Department of Labor application form. The form is available at www.dol.gov/COBRA
and can be completed online or mailed or faxed as indicated in the instructions.
If you believe you have been inappropriately denied eligibility for the premium
reduction, you may wish to speak with an Employee Benefits Security
Administration Benefits Advisor at 1.866.444.3272 before filing this form.
Plan administrators must provide, as part of the COBRA election
notice materials, a General Notice to all qualified beneficiaries, not just
covered employees, who experience a qualifying event at any time from September
1, 2008 through February 28, 2010, regardless of the type of qualifying event.
For qualifying events occurring after the December 19, 2009 date of enactment,
this notice must be provided within the normal timeframe for providing a COBRA
election notice.
Certain individuals who have already been provided a COBRA election notice
package (but that did not include a General Notice that was updated to reflect
the changes made to ARRA by the 2010 DOD Act) must also be provided notice of
these changes. Listed below are the affected individuals and the associated
timing requirements.
-
Individuals who were “assistance eligible individuals” as of October
31, 2009 (unless they are in a transition period - see below) and individuals
who experienced a termination of employment on or after October 31, 2009 and
lost health coverage (unless they were already provided a timely, updated
General Notice) must be provided notice of the changes made to the premium
reduction provisions of ARRA by the 2010 DOD Act by February 17, 2010;
-
Individuals who are in a “transition period” must be provided notice
of the changes made to the premium reduction provisions of ARRA by the 2010 DOD
Act within 60 days of the first day of the transition period. (The transition
period begins immediately after the end of the nine months of premium reduction
in effect under ARRA before the amendments made by the 2010 DOD Act, as long as
the premium reduction provisions of the 2010 DOD Act would apply due to the
extension from nine to 15 months).
Note: some individuals may be entitled to multiple notices. To satisfy the
notice requirements, these individuals may be provided a single notice that
includes all of the required information so long as the notice is provided by
the earliest date required.
If the qualifying event was something other than a termination of
employment, nothing. If the qualifying event was a termination of employment,
notice of the changes to ARRA made by the 2010 DOD Act must be provided by
February 17, 2010. For qualifying events occurring after December 19, 2009, an
updated General Notice must be provided within the normal timeframe for
providing a COBRA election notice.
No.
|
