Torkildson Katz Fonseca Moore & Hetherington Attorneys At Law

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DOL Issues New COBRA Notices
On December 19, 2009, President Obama signed into law the Department of Defense Appropriations Act for Fiscal Year 2010 (DoD Act), which extends the COBRA subsidy provided under the American Recovery and Reinvestment Act (ARRA).

The DoD Act amends the ARRA in three major ways. First, the period of eligibility for individuals who are involuntarily terminated is extended an additional two months so that the eligibility period now runs from September 1, 2008 through February 28, 2010. The law also clarifies that to qualify for the subsidy, only the termination from employment, not the loss of coverage, must occur on or before February 28, 2010. Second, the maximum duration of the subsidy is extended from 9 months to 15 months. The 65 percent subsidy amount remains the same. Third, the extensions under the amendment apply retroactively. This means that individuals who received and exhausted their subsidy after nine months may be entitled to an additional six months of subsidized coverage, even if they already chose to terminate COBRA continuation coverage after the original nine-month subsidy period was exhausted.

The amendment also requires employers or plan administrators to notify current and former plan participants affected by changes. On January 13, 2010, The Department of Labor issued new model notices, which have been designed for particular groups of qualified beneficiaries, reflecting the changes. The updated General Notice should be sent to all qualified beneficiaries (not just covered employees) who experienced a qualifying event on or after December 19, 2009 through February 28, 2010, regardless of the type of qualifying event. The Premium Assistance Extension Notice should be sent to affected individuals who have already been provided a COBRA election notice that did not include information regarding the extension. A copy of the updated model notices are available below.