Labor Posts COBRA Notices

The Employee Benefits Security Administration has released model notices that can help employers and their benefits advisors comply with the new American Recovery and Reinvestment Act.

Employers can use notices based on the models to implement the health benefits continuation provisions of ARRA.

The provisions require employers that offer group health coverage and are subject to the Consolidated Omnibus Budget Reconciliation Act health coverage continuation requirements to help the federal government offer subsidized continuation benefits to laid-off workers.

In the past, workers accepting COBRA benefits had to pay 102% of the cost.

Now, the government will pay 65% of the cost and workers must pay 35%. Employers do not have to pay for the coverage, but they cannot pay for their help with administering the subsidy.

Employers also are supposed to offer the subsidized coverage to additional laid-off workers who qualify for continuation benefits under state laws that resemble COBRA, officials say.

Employer-sponsored health plans are supposed to offer the subsidized coverage to newly laid-off employees to try to track down and offer the subsidized coverage to all other eligible former employees terminated since Sept. 1, 2008.

The notices now posted on the Web site of EBSA, an arm of the U.S. Labor Department, include a general notice and a short version of the general notice.

The full version includes information on the premium reduction as well as information required in a COBRA election notion, EBSA officials write in an explanation of the model.

The short version “includes the same information as the full version regarding the availability of the premium reduction and other rights under ARRA, but does not include the COBRA coverage election information,” officials write. “It may be sent in lieu of the full version to individuals who experienced a qualifying event during on or after [Sept.] 1, 2008, have already elected COBRA coverage, and still have it.”