In our February 27, 2009 Courtwatch, Vantage Solutions LLC told you about the COBRA premium reduction under the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA reduces the premium to 35% for those individuals who experience a loss of coverage due to involuntary termination from employment between September 1, 2008 and December 31, 2009. ARRA mandates that notification of the subsidy be given to certain current and former participants and beneficiaries. Different forms of notice must be given to particular groups of qualified beneficiaries.

• The first notice, General Notice, must be sent to all qualified beneficiaries who have not been sent a COBRA notice or who were sent notice after February 17, 2009 that did not explain eligibility for the premium reduction.


• The second notice, Abbreviated General Notice, must be sent to all qualified beneficiaries who had a qualifying event after September 1, 2009 and elected COBRA.


• The third notice is the Notice of Extended Election Periods, which must be sent to individuals who were involuntarily terminated between September 1, 2008 and February 17, 2009 and are not currently enrolled in COBRA continuation coverage because they either waived coverage or elected coverage and have since discontinued it. This notice informs individuals that they are eligible for the subsidy and have a 60-day period to elect COBRA coverage.

Regardless of the particular classification of a beneficiary, all employers must do the following:

1. Review records to identify employees who were involuntarily terminated since September 1, 2008.


2. Notify eligible individuals of their new rights and responsibilities under ARRA.


3. Develop procedures for administering COBRA subsidies. Coordinate with your payroll system to determine a process for obtaining the payroll tax credit.


4. Revise charges on premium statements that are sent to COBRA participants.

Vantage Solutions LLC is here to help you comply with ARRA's notification requirement. Call us at 312.440.0602.