Thursday, April 2, 2009

New Cobra Law

There is a fair amount of confusion over a recent piece of legislation passed. The American Recovery and Reinvestment Act of 2009 (ARRA) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA.

Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.

The following link will take you to the COBRA Model Notices posted on the DOL site, including the Notice in Connection with Extended Election Periods.

Plans subject to the Federal COBRA provisions must send the Notice in Connection with Extended Election Periods to any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election were in effect) who:

1. Had a qualifying event at any time from September 1, 2008 through February 16, 2009; and

2. Either did not elect COBRA continuation coverage, or who elected it but subsequently discontinued COBRA.
This notice includes information on ARRA’s additional election opportunity, as well as premium reduction information. This notice must be provided by April 18, 2009.

If you have additional questions or would like some guidance give us a call at 650-533-8387 and we would be happy to talk it through with you.

As you know, our blog is for information purposes only and does not provide legal or health advice. This information should be reviewed with appropriate legal/health counsel.

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