How should employers notify individuals about the COBRA premium subsidy?

Plan administrators already required by federal law to send an election notice must amend their notice to include information about the premium subsidy, or include a separate document about the subsidy with their notice. If there is an option to enroll in different coverage, it also should be included (see ¶42,567 ).

Specifically, notices should include:

• the forms necessary for establishing eligibility for the premium reduction;

• the name, address and telephone number necessary to contact the plan administrator and any other person maintaining relevant information in connection with the premium reduction;

• a description of the extended election period;

• a description of the qualified beneficiary's obligation to notify the plan of eligibility for subsequent coverage under another group health plan or Medicaid, and the penalty (110 percent of the premium reduction) for failure to do so;

• a description, displayed in a prominent manner, of the qualified beneficiary's right to a reduced premium and any conditions on entitlement to the reduced premium; and

• a description of the option of the qualified beneficiary to enroll in different coverage if the employer permits it.

In addition, a new notice must be given to qualified beneficiaries entitled to the special election period (see ¶42,566 ). Employers have until April 18, 2009, to retroactively notify eligible individuals.

Model notices. On March 19, 2009, the U.S. Department of Labor issued four model notices to help plan administrators, employers and insurers to comply with the premium subsidy requirements. Use of the model notices is not required, but will help ensure compliance. Each model notice is designed for a particular group of qualified beneficiaries.

1. General notice (full version). Plans subject to the federal COBRA provisions must send the General Notice to all qualified beneficiaries, not just covered employees, who experienced a qualifying event at any time from September 1, 2008 through December 31, 2009, regardless of the type of qualifying event, AND who either have not yet been provided an election notice or who were provided an election notice on or after February 17, 2009 that did not include the additional information required by ARRA. This full version includes information on the premium reduction as well as information required in a COBRA election notice.

2. General notice (abbreviated version). The abbreviated version of the General Notice 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. It may be sent in lieu of the full version to individuals who: (1) experienced a qualifying event during on or after September 1, 2008; (2) have already elected COBRA coverage; and (3) still have COBRA coverage.

3. Alternative coverage election notice for state laws. Insurance issuers that provide group health insurance coverage must send the Alternative Notice to persons who became eligible for continuation coverage under a state law. Continuation coverage requirements vary among states, and issuers should modify this model notice as necessary to conform it to the applicable state law. Issuers may also find the model Alternative Notice or the abbreviated model General Notice appropriate for use in certain situations.

4. Extended election period notice. This notice, which must be provided by April 18, 2009, includes information on ARRA’s additional election opportunity, as well as premium reduction information. Plans subject to the federal COBRA provisions must send the Notice in Connection with Extended Election Periods to any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election were in effect) who: (1) had a qualifying event at any time from September 1, 2008 through February 16, 2009; and (2) either did not select COBRA continuation coverage, or elected it but subsequently discontinued COBRA coverage.

The model notices are reproduced at ¶15,880 .