Department of Labor Issues Model COBRA Subsidy Notices: Employers Must Take Action Immediately to Meet April 18, 2009 Deadline

March 20, 2009

The American Recovery and Reinvestment Act of 2009 provides for a temporary federal subsidy of 65 percent of COBRA premium costs for "assistance eligible individuals" who become eligible for COBRA continuation coverage between September 1, 2008 and December 31, 2009 due to the involuntary termination of a covered worker. Under the Act, plans must notify appropriate individuals by April 18, 2009 about the COBRA premium reduction, and in some cases about extended election rights. The Labor Department recently issued the following model notices to aid compliance with these notice requirements:
 
General Notice (Full version). This General Notice is intended for qualified beneficiaries with qualifying events occurring between September 1, 2008 and December 31, 2009, who either have not yet been provided an election notice or who were provided an election notice on or after February 17, 2009 that did not include the additional information required by the Act. 
 
General Notice (Abbreviated version). This abbreviated version of the General Notice may be sent in lieu of the full version to qualified beneficiaries with qualifying events that occurred on or after September 1, 2008 who already elected, and still have, COBRA coverage. 
 
Notice in Connection with Extended Election Periods. This notice concerning extended election periods is intended for any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election were in effect) who (i) had a qualifying event at any time from September 1, 2008 through February 16, 2009, and (ii) either did not elect COBRA continuation coverage, or elected but subsequently discontinued it. 

If you would like more information on the content of this alert, please contact Christine Burke Worthen, a
shareholder and Chair of Eaton Peabody's Tax Practice Group, or Rodney A. Lake.

This alert is provided as general information, and is not a substitute for legal or other professional advice.