Newly Extended COBRA Subsidy Rules Require Employers, Administrators Send Required Notices & Update Health Plan Documents & Procedures Quickly


Employer and union sponsored group health plans, their sponsors and administrators must act quickly to provide required notifications and implement other plan document and procedural changes required to comply with the extension and expansion of temporary “COBRA Subsidy Rules” for “assistance eligible individuals” signed into law as part of the Department of Defense Appropriations Act (H.R. 3326).  In some cases, required notifications are due in early February, 2010.

The COBRA Subsidy Rules originally were added to the group health plan medical coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) by the American Recovery and Reinvestment Act of 2009 (“AARA”) last February and extended and expanded just before Congress recessed for the Holidays.  H.R. 3326 extended the period that employer and union-sponsored group health plans must allow employees and members of their family that lose group health plan coverage due to an involuntary employment loss to continue their group medical coverage under the reduced premium and other temporary ARRA COBRA Subsidy Rules and lengthened the period during which an involuntary employment loss can qualify an otherwise COBRA-eligible employee or dependent as an assistance eligible individual.  Health plan administrators must provide notifications to assistance eligible individuals and restore COBRA eligibility and coverage at reduced premiums for certain assistance eligible individuals who allowed their coverage to lapse before the extension. Legislation that would reduced the premiums health plans are allowed to charge and further extend the rules to June, 2010 still is pending in Congress.  Curran Tomko Tarski LLP already has worked with several clients to understand these changes, amend their documents and prepare notices.   Read more.

Group health plans, their employer or union sponsors, administrators, insurers and service providers will need to act quickly to prepare and provider required updated notifications to assistance eligible individuals of these extended eligibility periods and their resulting rights,  and otherwise update their plan documents, procedures, and COBRA notifications in light of these new rules. 

If you have questions about or need assistance evaluating, commenting on or responding to these or other employment, health or other employee benefit, workplace health and safety, corporate ethics and compliance or other concerns or claims, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer.  The author of the “Health Plan Eligibility Toolkit,” Ms. Stamer is experienced with assisting employers, insurers, administrators, and others to design and administer group health plans cost-effectively in accordance with COBRA and other applicable federal regulations as well as well as advising and defending employers and others against tax, employment discrimination and other labor and employment, and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators.. Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group, a representative to the ABA Joint Committee on Employee Benefits Council, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer has advised and represented employers on these and other labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 22 years. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.   For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

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©2009 Cynthia Marcotte Stamer. All rights reserved. 

This entry was posted on Wednesday, January 6th, 2010 at 12:29 PM and is filed under ARRA, Bankruptcy, COBRA, COBRA Subsidy, Corporate Compliance, Employers, Health Plans, Human Resources, Stimulus Bill, Tax. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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