Recent Publications
March 20, 2009
Recovery Act COBRA Subsidy: Department of Labor Issues Fact Sheets and Model Notices
Action Required by April 18
Late yesterday, the Employee Benefits Security Administration (EBSA) of the Department of Labor issued:
- A long form model notice for Employers to send to those eligible for the COBRA Subsidy who have not yet received notice of their COBRA rights. This notice must be filled out by the employer with employee-specific information and information on the plans for which the employee can elect COBRA and the premium cost before it is mailed. Employees can elect the coverage they had when coverage ended, but if an open enrollment has since occurred and coverage has changed, you will need to also include information about the new coverage in effect. Employers can allow employees to switch to a different, but less expensive coverage option, but employees then have 90 days to make their election, and we expect most employers will not want to add this complication.
- A shorter form of notice that can be sent to those who are eligible for the subsidy, but who already elected and are participating in COBRA.
- Notice to send to employees and beneficiaries who are eligible for the subsidy, but who previously failed to elect COBRA or elected and dropped coverage.
Each notice, linked above, is in WORD format so that you can add information specific to your plan and the eligible employee.
EBSA also published questions and answers about the COBRA subsidy and election process, both
for employers and
for employee information, in both English and Spanish.
See our earlier client alert for more information about who is eligible for the subsidy and your obligations as an employer. Employers have
until April 18 to send notices out about the subsidy. Former employees get 60 days from when the notice is sent to elect COBRA, even if they previously rejected it or failed to pay after electing. Coverage for those who previously did not take or dropped COBRA must start for the first coverage period after February 17 (generally March 1 unless your plan provides coverage for partial months), and will still end when COBRA would have ended based on their date of termination and original loss of coverage.
The IRS has published questions and answers about how employers can claim the 65% of premium back via offset against tax withholding remittances.
Click here for more information on this process.
Please contact any of the attorneys in Frost Brown Todd's Employee Benefits Practice Group for more information.