March 2009 E-Alert
Model COBRA Notices

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (“ARRA”) which included massive, yet presumably temporary, changes to COBRA. As we have advised in our E-Alert of February 20, 2009 and our March 6, 2009 Webinar, the principal change here is a mandate for employers to provide “subsidized premium assistance” for employees and their dependents who lose health coverage because of involuntary termination of employment

Today, Department of Labor published Model Notices to assist in communicating and administering these changes. We have attached these Model Notices for your review.

As with any model notice, these have strengths and weaknesses but their use offers a level of comfort that your communications will at least minimally comply with law. We are reviewing the Notices and will offer assistance as needed with their use and tailoring. Their content and uses are as follows:

General Notice. Plans subject to COBRA must send this Notice to all qualified beneficiaries (employees and dependents) who lose/lost health plan coverage and became COBRA eligible between September 1, 2008 through December 31, 2009, regardless of reason why they lost coverage. This Notice includes information on the premium subsidy and the typical COBRA election information.

Abbreviated General Notice. The short form includes similar information as the General Notice, but does not include typical COBRA election data. It may be sent in lieu of the General Notice to persons who had a qualifying event during on or after September 1, 2008, but elected COBRA coverage, and still have it.

Alternative Notice. Insurance companies that provide insured group coverage must send the Alternative Notice to persons who became eligible for continuation coverage under a State law. Because continuation requirements vary among the States, this notice must be heavily tailored to conform to applicable State law.

Extended Election Period Notice. Plans subject to COBRA must issue this Notice to any “assistance eligible individual” (or person who would be if a COBRA continuation election were in effect) who:  

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

2. Either did not elect COBRA, or who elected it but discontinued COBRA.

This notice includes information on ARRA’s additional election opportunity and premium subsidy information. This notice must be provided by April 18, 2009.

If you have any questions about any of the items listed above, please do not hesitate to contact any of the lawyers at the Lowenbaum Partnership, L.L.C.

This E-Alert is intended as in informal summary of certain recent legislation, cases, rulings and other developments. This E-Alert does not constitute legal advice or a legal opinion and is not an adequate substitute for advice of counsel. This E-Alert is not intended to nor does it create an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely upon advertisements. If this E-Alert is deemed to be an advertisement please disregard this solicitation if you have already engaged a lawyer in connection with the legal matter referred to in this solicitation. You may wish to consult your lawyer or another lawyer instead of us. The exact nature of your legal situation will depend on many facts not known to us at this time. You should understand that the advice and information in this solicitation is general and that your own situation may vary. This statement is required by rule of the Supreme Court of Missouri.  

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