Please be advised that the COBRA subsidy program has been extended through 5/13/2010. This is the third extension through the Continuing Extension Act of 2010.
Special Election Period
A health plan must extend a special COBRA election period to an individual who experienced an involuntary termination of employment on or after April 1, 2010, and prior to April 15, 2010, and who would be an “assistance eligible individual” (AEI) but who does not have a COBRA election in effect on April 15, 2010. The special election period runs from April 15, 2010, through 60 days after the Notice of Special Election Period is provided to that individual.
Notice of Special Election Period
In the case of any individual who experienced a qualifying event related to a termination of employment between April 1, 2010 and April 15, 2010, an employer must provide the general COBRA notice, including a description of the availability of premium reduction in the case of a qualifying event that is an involuntary termination of employment, within 60 days of enactment of the Act or by June 14, 2010. If the general COBRA notice was already distributed, then employers may simply supplement it with an additional notice describing the extension of the availability of premium reduction with respect to involuntary terminations through May 31, 2010, and the special election period.
A Reminder – Expansion of Assistance Eligible Individuals
Under previous legislation, only individuals who experienced a qualifying event that was an employee’s involuntary termination of employment could become AEIs and take advantage of the COBRA premium subsidy. The Temporary Extension Act of 2010 expanded the premium subsidy to include as a qualifying event for purposes of the subsidy, a reduction of hours that occurred at any time on or after September 1, 2008, and is followed by an involun¬tary termination of employment that occurs on or after March 2, 2010 (and before June 1, 2010). Individuals who experience a qualifying event that falls under this expanded definition and are otherwise eligible AEIs will be eligible for the COBRA subsidy beginning with the first day of the first period of coverage for which the individual is affected.
Action Items
>>Notices. Employers should update their COBRA notices and other plan communications to include the extension of the eligibility period to May 31, 2010.
>>Assess Prior Terminations. Identify covered employees (and their qualified beneficiaries) who became eligible for COBRA on or after April 1, 2010, and before April 15, 2010, as well as their COBRA elections. Provide an updated COBRA notice to these individuals that includes a description of the extended eligibility period and the special election period. Identify those employees and beneficiaries in the group whose qualifying event is the employee’s involuntary termination of employment and who are eligible for the COBRA subsidy.
