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must be given special notices. Individuals who could have elected COBRA
due to
being involuntarily terminated between September 1, 2008 and February 17, 2009
(date bill signed into law) but did not do so will be given a “second chance”
election. The second chance election
period will begin on
or after
February 17,
2009 and will end 60 days after the date on which they receive the special COBRA
premium subsidy notice from the plan of this right
for a second chance COBRA
election. The notices will also provide individuals who elected COBRA prior to
February 17, 2009 with information on how to apply for the COBRA subsidy. The
same information will be given to individuals who become eligible for COBRA due to
an involuntary termination on or after February 17, 2009.
Plans
must send out this information of special election rights and the
COBRA premium subsidy within 60 days of February 17, 2009 which is
on
or about April 18. The law contains detailed notice content requirements which
are discussed later herein.
This additional information can be communicated by modifying existing forms or
adding a separate information sheet to the Plan’s current COBRA
forms. Using a
separate information sheet for each mailing seems easier and more efficient due to
the limited length of the program.
The government has indicated that the model
notices should be available on or about March 19, 2009.
Employers or multiemployer plans will be required to file reports containing (1) an
attestation of involuntary termination of employment for each covered employee on
the basis of whose termination entitlement to reimbursement is claimed; (2) a
report of the amount of payroll taxes offset for the reporting period and the
estimated offsets of such taxes for the subsequent reporting period in connection
with reimbursements [NOTE: this payroll offset method will need to be modified for
multiemployer plans] and (3) a report containing the TINs of all covered
employees, the amount of subsidy reimbursed with respect to each covered
employee and qualified beneficiaries, and a designation with respect to each
covered employee as to whether the subsidy reimbursement is for coverage of one
individual or two or more individuals.
The subsidy is only applicable to individuals with modified adjusted gross income of
$125,000 or $250,000 per couple.
The law addresses other aspects of the rules
concerning the subsidy and such “high-income” people. Plans will need to monitor
subsidy applicant’s income levels. Other details of the law are discussed below.
What is One to Do?
No doubt there will be many unanswered questions until interpretative guidance
and model notices are issued. Until then, Plans will have to make their best “good-
faith” interpretations.
Various publications have developed “to do” lists to prepare for the new notice
requirement and administration of the program. We have collected some of these