e3 Compliance Navigator™ Logine3 Financial News Archive For January / February 2009
ARRA Bill Changes COBRA Regulations
Feb 17, 2009
As you are aware, the American Recovery and Reinvestment Act of 2009 (ARRA) was signed into law by President Obama on February 17th, 2009, and provides a 65-percent subsidy on federal COBRA and COBRA-comparable state continuation premiums for certain assistance eligible individuals (AEIs) for up to nine months.
The Department of Labor has set a deadline of April 18th, 2009 for all ARRA COBRA notices to be mailed out to any employee terminated involuntarily after September 1st, 2008.
Any small group employer that currently offers Cal-COBRA (20 or less employees) should be aware that it is the carrier's responsibility to administer Cal-COBRA, but should also be advised that there is a penalty on the employer if a notice is not sent out to all involuntarily terminated employees after September 1st, 2008.
Please click on the link below to review the model notices made available by the Department of Labor:
http://www.dol.gov/ebsa/cobramodelnotice.html
We have two suggestions for all small group employers that offer Cal-COBRA:
1) Contact your current medical carrier to find out how the ARRA subsidy is being handled.
2) As a precaution, mail out a COBRA ARRA notice to all employees involuntarily terminated after 9/1/08 before the deadline of 4/18/09.
