HR Management & Compliance

New COBRA Notices You Must Use by 2/17

The American Recovery and Reinvestment Act of 2009 (ARRA) was enacted in February 2009. Among other things, the ARRA provides a COBRA premium subsidy for employees who are laid off or terminated. The subsidy requires employers to pay for 65 percent of a separated employee’s COBRA premium, which the federal government then reimburses to employers.

Initially, the subsidy was available to any employee terminated or laid off between September 1, 2008 and December 31, 2009.

As part of the Department of Defense Appropriations Act of 2010, the ARRA’s COBRA subsidy program has been extended to cover employees laid off or terminated before February 28, 2010. This means that employees are now eligible for up to 15 months of COBRA premium assistance through the subsidy program.

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Any employee who receives employer-sponsored health benefits, and who has separated from employment, must receive a COBRA notice and notice of the subsidy program, regardless of whether the employee was laid off, terminated, or resigned.

Employees who separate from a company that has 20 or more employees at any time before February 28, 2010 should get the General Notice.

The General Notice should also be provided by February 17, 2010 to any employee who has separated from employment since September 1, 2008 and who has not already been given COBRA notice and/or notice of the subsidy program. Penalties can be imposed on employers who fail to provide the required notice, and giving notice late is better than failing to give notice at all.

Employees who are already enrolled in the ARRA COBRA subsidy program should receive the Premium Assistance Extension Notice, also by February 17, 2010.

Employees of companies with between 2 and 19 employees that provide health coverage under Cal-COBRA should receive the Alternative Notice by the same deadline as the other notices.

Employees who separate from employment between February 17 and February 28, 2010 should receive the applicable notice upon termination, or as soon as possible thereafter.

CEA subscribers can access our customized model notices, which have been tailored to comply with California law, and which can conveniently be filled out electronically using Adobe Acrobat, with the February issue of the newsletter.

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