March 27, 2009 – More New Developments Regarding Continuation Coverage Premium Subsidies.
DOL Releases Model Notices and FAQs Regarding Continuation Premium Subsidies.
As required by the American Recovery and Reinvestment Act of 2009 (the “ARRA”), last Thursday the U.S. Department of Labor (the “DOL”) released the following model notices:
- a general notice (full version) describing the premium subsidy to be provided to individuals who have not yet experienced a COBRA qualifying event, have experienced a qualifying event but have not yet received their COBRA election notice, or received a COBRA election notice on or after February 17th that did not include information regarding the premium subsidy;
- a general notice (abbreviated version) describing the premium subsidy to be provided to individuals who currently have COBRA continuation coverage;
- an alternative notice describing the premium subsidy to be provided to individuals who have or become eligible for continuation coverage solely under a state continuation law; and
- a notice describing the special election period and the premium subsidy to be provided to those individuals entitled to the special election opportunity provided by the ARRA.
The model notices are intended to assist with the notification of individuals of the new rights created by the ARRA. Note: Remember these are “model” notices; the can be modified and in some cases, they should be modified. The notices are available from the DOL website at: http://www.dol.gov/ebsa/COBRAmodelnotice.html.
Along with the model notices, the DOL released two sets of FAQs regarding the continuation coverage provisions of the ARRA. These FAQs are available at: http://www.dol.gov/ebsa/cobra.html.
Legislation Proposed to Amend Minnesota Continuation Law. In another development related to the new continuation coverage rules, legislation was proposed on March 25th in the Minnesota House (H.F. No. 2138) and Senate (S.F. No. 1904) to provide a special election opportunity under Minnesota continuation coverage law. As we noted in our prior alert regarding the continuation coverage premium subsidy (https://www.hitesmanlaw.com/news_events/alert_090223.shtml), the special election period provided by the ARRA is available only with respect to plans subject to federal COBRA (through ERISA, the Internal Revenue Code, or the Public Health Services Act). The ARRA does not require plans subject only to state continuation laws (e.g., fully insured plans sponsored by small employers or churches) to offer the special election period. If the proposed legislation is enacted, plans subject only to Minnesota continuation coverage law will also be required to offer the special election period. We will provide an update if and when the legislation is passed.
Note: Wisconsin law also requires continuation coverage to be provided by fully insured health plans. We are not aware whether legislation has been introduced in Wisconsin to require a special election period under Wisconsin law. We will provide future updates regarding Wisconsin law if any changes are made to the law.
More to Come . . . .
IRS To Issue Guidance Regarding Involuntary Terminations. IRS officials have informally stated the IRS is working on guidance regarding what constitutes an involuntary termination for purposes of the ARRA. Such guidance would be welcome, as the issue of what constitutes an involuntary termination is one with which many employers are struggling. We will provide an update once the IRS guidance is released.
If you have any questions regarding the continuation coverage premium subsidy issues, or need assistance using the DOL model notices (or preparing your own notices), please let us know.
__________________________________________________________________
The information contained in this ALERT is intended for general information purposes only and does not constitute legal advice relative to a specific situation.