U.S. Labor Department announces updated model notices and webcast on extension of COBRA subsidy

Washington – The U.S. Department of Labor has released three model notice packages that will enable group health plans and employers to provide notice on the availability of the extension of the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage premium reductions under the American Recovery and Reinvestment Act (Recovery Act). A free webcast will be held on Jan. 22, from 1 to 3 p.m. (EST) to help employers, plan administrators and service providers comply with the notice requirements.

The Department of Defense Appropriations Act of 2010 amended the Recovery Act's COBRA premium reduction provisions extending the eligibility period for two additional months and the duration from nine to 15 months. Eligible individuals pay only 35 percent of their COBRA premiums, and the remaining 65 percent is reimbursed to the employer through a tax credit.

"Our action today gives workers and their families useful information to keep important health benefit coverage during these challenging economic times. We also are making it easy for employers and plans to meet their obligations to provide the notices," said Phyllis C. Borzi, assistant secretary of the Labor Department's Employee Benefits Security Administration (EBSA).

The department updated two of its existing models and developed a new model to cover various situations faced by dislocated workers and their families. They are:

• An updated model general notice that includes updated information on the premium reduction as well as information required in a COBRA election notice.
• A new model premium assistance extension notice that includes information on the extension of the premium assistance from nine to 15 months and on the right to make retroactive, reduced premium payment(s).
• An updated model alternative notice for use by issuers of group health insurance coverage subject to state continuation coverage laws.

The model notice packages are available for download from EBSA's dedicated Web page at http://www.dol.gov/cobra. The Web page also contains updated frequently asked questions, a fact sheet and a poster to help dislocated workers, their families and employers understand the requirements. A notice announcing the model notices appeared in the Jan. 15 edition of the Federal Register.

Register online for the webcast at the Web address above or contact Sandra Lynch at 202.693.8671.