Transcript Employment Issues in the Cyber Age

COBRA PREMIUM
ASSISTANCE
EXTENDED
Call 1-866-740-1260
Access Code 8796401 to hear the audio portion
Tuesday, January 12, 2010
Erwin D. Kratz and Jennifer Mammano Ward
Fennemore Craig, PC
[email protected]
[email protected]
(602) 916-5000
(520) 879-6800
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Housekeeping
• Call 1-866-740-1260. Access Code
8796401 to hear the audio portion
• Your telephone has been muted
• Email your questions to [email protected]
during the webinar
• We will answer as many questions as we
can at the end of the webinar
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COBRA Premium Assistance
(Recap of Original Provisions)
• An individual is an Assistance Eligible
Individual (“AEI”) if:
– Eligible for COBRA at any time between
September 1, 2008 and December 31, 2009
– Elects COBRA coverage
– Qualifying event was involuntary termination of
employment between September 1, 2008 and
December 31, 2009
• AEI pays 35% of COBRA premium
• Premium Assistance = 65%
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COBRA Premium Assistance
(Recap of Original Provisions)
•
Premium Assistance Ends on Earliest of:
–
9 months after assistance begins
•
–
–
–
•
Initial recipients lost eligibility as of 11/30/2009
Eligibility for Medicare
Eligibility for another group health plan
When COBRA coverage otherwise ends
Notice requirements
–
COBRA election notice revised/supplemented to
include notice of availability of premium reduction
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COBRA Premium Assistance
(Recap of Original Provisions)
•
Transition Issue
– If Assistance Eligible Individual paid
100% of COBRA Premium for First or
Second Coverage Period After
Enactment Employer was required to
reimburse the excess or credit the
individual with the excess:
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Extended COBRA Premium
Assistance
• An individual is an Assistance Eligible
Individual (“AEI”) if:
– Eligible for COBRA related to a qualifying event
occurring between September 1, 2008 and February
28, 2010
– Elects COBRA coverage
– Qualifying event was an involuntary termination of
employment
• This eliminates the old rule that both the involuntary
termination and the COBRA coverage had to start before
12/31/2009 (2/28/2010)
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Extended COBRA Premium
Assistance
• Premium Assistance Period Extended from
9 to 15 months
• Retroactive Premium Payment Rights
• New Notice Requirements
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Extended COBRA Premium
Assistance
• Retroactive Premium Payment
– Anyone who previously exhausted their 9 months of
premium assistance and regained status as an AEI as a
result of the extension gets an extension of time to pay
the reduced premium. Extended payment premium
period ends on later of:
• 30 days after receipt of notice of the extended payment period
• 60 days after enactment (i.e. by February 17, 2010)
– Anyone who already paid the full premium and is now
an AEI again is entitled to a refund or credit for the
excess.
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Extended COBRA Premium
Assistance
• New Notice Requirements
– Within 60 days after enactment (i.e. by
February 17, 2010), notify the following
people of the extension:
• Everyone who was an AEI on or after October 31,
2009; and
• Everyone who experienced a qualifying event
consisting of termination of employment on or after
October 31, 2009 and before December 19, 2009
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Extended COBRA Premium
Assistance
• New Notice Requirements
– Notify everyone who experiences a qualifying event
consisting of termination of employment on or after
December 19, 2009 of the extension. Provide notice in
accordance with regular COBRA notification timing
requirements
– Notify everyone who (i) exhausted their 9 months of
eligibility for premium assistance before December 19,
2009, and (ii) regained status as an AEI as a result of
the extension of their eligibility to pay premiums
retroactively. Provide notice within 60 days after the
date they exhausted their eligibility for premium
assistance (i.e. by February 1, 2010)
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Extended COBRA Premium
Assistance
• To Do #1: Develop a new supplemental notice explaining
the extension and eligibility to pay premiums retroactively.
– Provide this supplemental notice on or before February 1, 2010
(ideally on or before Monday, January 18) to
• Everyone who was an AEI as of October 31, 2009; and
• Everyone who experienced a qualifying event on or after October 31,
2009 and already received their COBRA election notice
• DOL has finalized a model notice but has not posted it to its web site
yet
• To Do #2: Revise existing COBRA qualifying event
notices to account for the extension
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Questions?
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Additional Proposed Extensions
 Senate COBRA Subsidy Extension Bill (S2730)
 Introduced November 4, 2009 (referred to committee)
 Would extend the subsidy to individuals who are involuntarily
terminated between January 1, 2010, and June 30, 2010
 Would add a reduction in hours as an event that triggers subsidy
eligibility
 Would increase the subsidy amount from 65% to 75%
 Would extend the maximum subsidy period from 9 months to 15
months
 individuals whose coverage already expired under the original time limit
would only get an additional 3 months for a total of 12 months of subsidy
coverage
 Would terminate all subsidy eligibility on December 31, 2010
(even if the 15 month eligibility period has not otherwise
terminated)
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Additional Proposed Extensions
 House COBRA Subsidy Extension Bill (H.R. 3930)
 Introduced October 26, 2009 (referred to committee)
 Would extend all COBRA coverage (not just subsidy period) for all
individuals who became eligible due to a termination of
employment or reduction of hours between April 1, 2008 and
January 1, 2010 from 18 months to 24 months (and would give
those who would be eligible but for the fact that their coverage had
expired a new election period)
 Would extend the maximum subsidy period from 9 months to 15
months
 Would terminate all subsidy eligibility on December 31, 2010
(even if the 15 month eligibility period has not otherwise
terminated)
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Additional Proposed Extensions
 House COBRA Subsidy Extension
Bill (H.R. 3966)
 Introduced October 29, 2009 (referred to
committee)
 Would extend the subsidy to individuals who
are involuntarily terminated between January 1,
2010, and June 30, 2010
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