COBRAToday Ready to Handle New COBRA Extension

With the passing of the Department of Defense Appropriation Act, 2010 (DODAA, 2010, or H.R. 3326), Congress has extended COBRA coverage to several hundred thousand existing COBRA Qualifying Beneficiaries as well as others who involuntarily lose their health coverage.  The legislation outlines that:
  • Eligibility for the Recovery and Reinvestment Act (ARRA) federal health insurance premium subsidies is extended from December 31, 2009 to February 28, 2010.
  • The 65 percent subsidy is extended from 9 months to 15 months.
These extensions are especially welcome news for those who continue to struggle with unemployment during these tough economic times.  Meanwhile, managing and incorporating these changes will pose additional challenges for employers, especially employers who have not outsourced their COBRA administration to a third-party administrator.  TASC advises those employers to seek trustworthy assistance during this time of transition.  COBRAToday is here to help you navigate the rough seas of COBRA administration.  If you need assistance implementing COBRAToday, please contact a TASC Added Advantage Representative at 1-888-595-2261, ext. 17730.

In addition, the legislation imposes the following:
  • Beneficiaries whose subsidy expired and who did not pay the full premium may request retroactive coverage.
  • Employers must notify current and future COBRA beneficiaries of the new 15-month premium subsidy.
  • Employers may either offset future COBRA premiums for, or issue refund checks to, beneficiaries who overpaid their COBRA premiums.
  • Employers must allow a 60-day time-frame in which retroactive premiums payments may be made for COBRA Assistance Eligible Individuals (AEI) (a) whose subsidy period expired November 30th and (b) who had not yet paid their December premium.
  • The COBRA subsidy eligibility is further clarified.  A Primary Qualified Beneficiary (PQB) is eligible for the COBRA subsidy if their employment is involuntarily terminated (considered a qualifying event) on or before the new February 28, 2010 sunset date.  This termination deadline does not address when the period of COBRA coverage begins.  So, for employers who provided subsidized coverage that defers to the COBRA start date, the 15-month period may not commence until a future date.
The “look” of the new COBRA Notices is not yet known, nor is the date by which they must be distributed.  We are watching for this information and will promptly share it with you.

Four distinct categories of COBRA AEIs will be affected by these changes.  These are described below, along with the actions that will take place for each.
  1. AEIs with one or more months of COBRA eligibility remaining who have exhausted their ARRA subsidy and for whom their COBRA coverage was terminated.  These AEIs will receive communication describing their right to extend their subsidy and advising that they re-enroll in COBRAToday.  Included will be information about how much the Qualified Beneficiary (QB) must pay (the subsidized rate), and the deadline for doing so.
  2. AEIs enrolled in COBRA who are on a nine-month “ ARRA subsidy” that is not yet exhausted.  These QBs are eligible for up to six additional months of subsidy if they have at least one month of COBRA continuation remaining after the nine-moth subsidy exhausts.  They will be provided with a new subsidy exhaustion date, and may continue paying at the same rate they are currently paying.
  3. AEIs who are enrolled in COBRA, have exhausted their ARRA subsidy, and have already resumed paying the full monthly COBRA premium.  These QBs will receive communication about the changes in the law and providing the new date through which they may receive the ARRA subsidy.  They will also receive either payment coupons or notices detailing the amount of and deadline for COBRA payments that they must pay in future months.  COBRAToday will credit any premium overpayment caused by the elongated subsidy toward their 35 percent of premium due in future months.
  4. QBs with a First Day After Loss of Coverage occurring between November 1, 2009–February 28, 2010 who were notified of COBRA eligibility but have not enrolled.  Of these individuals, those who qualify as COBRA AEIs will be sent a new COBRA Election Notice, with 15 months of subsidy offered.  This new notice is required by law and will replace the previous notice describing the earlier nine month subsidy.
Additional information has recently been posted on the DOL website .  We encourage you to visit this site often for regular updates (http://www.dol.gov/ebsa/COBRA.html):
The TASC management team has thoroughly examined and extensively discussed the many changes and increased workload required to handle the new ARRA mandates for our COBRAToday Clients.  In the past we worked hard to manage the first ARRA stimulus for you, and we did so without imposing any additional fees, as you may recall.  After much study we are happy to announce that once again we will address the changes required by the latest ARRA legislation, and once again we will do so at no additional charge . 
It’s more important than ever to outsource your COBRA administration to a quality administrator such as COBRAToday.  TASC and COBRAToday are here to assist you with COBRA administration, including the changes imposed by this new legislation. 

If you need assistance implementing COBRAToday, please contact a TASC Added Advantage Representative at 1-888-595-2261, ext. 17730.