[Federal Register Volume 75, Number 54 (Monday, March 22, 2010)]
[Notices]
[Pages 13595-13597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6174]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
Publication of Model Notices for Health Care Continuation
Coverage Provided Pursuant to the Consolidated Omnibus Budget
Reconciliation Act (COBRA) and Other Health Care Continuation Coverage,
as Required by the American Recovery and Reinvestment Act of 2009
(ARRA), as Further Amended by the Temporary Extension Act (TEA) of
2010, Notice
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Notice of the availability of the Model Health Care
Continuation Coverage Notices required by ARRA, as further amended by
TEA.
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SUMMARY: On March 2, 2010, President Obama signed the Temporary
Extension Act of 2010 (Pub. L. 111-144), which extended, for a second
time, and expanded the availability of the health care continuation
coverage premium reduction provided for COBRA and other health care
continuation coverage as required by ARRA (Pub. L. 111-5). ARRA, as
amended, retained the requirement that the Secretary of Labor (the
Secretary), in consultation with the Secretaries of the Treasury and
Health and Human Services, develop model notices. These models are for
use by group health plans and other entities that, pursuant to ARRA, as
amended, must provide notices of the availability of premium reductions
and additional election periods for health care continuation coverage.
This document announces the availability of the model health care
continuation coverage notices required by ARRA, as further amended by
TEA.
FOR FURTHER INFORMATION CONTACT: Kevin Horahan or Mark Connor, Office
of Health Plan Standards and Compliance Assistance, Employee Benefits
Security Administration, (202) 693-8335. This is not a toll-free
number.
SUPPLEMENTARY INFORMATION:
I. Background
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
created the health care continuation coverage provisions of Title I of
the Employee Retirement Income Security Act of 1974 (ERISA), the
Internal Revenue Code (Code), and the Public Health Service Act (PHS
Act). These provisions are commonly referred to as the ``COBRA
continuation provisions,'' and the continuation coverage that they
mandate is commonly referred to as ``COBRA continuation coverage.''
Group health plans subject to the Federal COBRA continuation provisions
are subject to ARRA's premium reduction provisions and notice
requirements. The Federal COBRA continuation coverage provisions do not
apply to group health plans sponsored by employers with fewer than 20
employees. Many States require health insurance issuers that provide
group health insurance coverage to plans not subject to the COBRA
continuation provisions to provide comparable continuation
[[Page 13596]]
coverage. Such continuation coverage provided pursuant to State law is
also subject to ARRA's premium reduction provisions and notice
requirements.
II. Description of the Model Notices
a. In General
ARRA, as further amended, mandates the provision of certain
notices. Each of these notices must include: A prominent description of
the availability of the premium reduction, including any conditions on
the entitlement; a model form to request treatment as an ``Assistance
Eligible Individual''; \1\ the name, address, and telephone number of
the plan administrator (and any other person with information about the
premium reduction); a description of the obligation of individuals
paying reduced premiums who become eligible for other coverage to
notify the plan; and (if applicable) a description of the opportunity
to switch coverage options.
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\1\ In general, an ``Assistance Eligible Individual'' is an
individual who has experienced an involuntary termination of
employment that is a COBRA ``qualifying event'' at any time from
September 1, 2008 through March 31, 2010 if he or she elects such
COBRA coverage. For purposes of ARRA, certain involuntary
terminations are considered qualifying events despite the occurrence
of a previous qualifying event.
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The Department of Labor (the Department) created these model
notices to cover an array of situations in order to deal with the
complexity of the various scenarios facing dislocated workers and their
families. In an effort to ensure that the notices include all of the
information required under ARRA, as amended, while minimizing the
burden imposed on group health plans and issuers, the Department has
created several packages. As with those models previously developed by
the Department, each of the new packages is designed for a particular
group of qualified beneficiaries, and contains all of the information
needed to satisfy the content requirements for ARRA's new and amended
notice provisions. The packages include the following disclosures:
A summary of ARRA's premium reduction provisions.
A form to request the premium reduction.
A form for plans (or issuers) that permit qualified
beneficiaries to switch coverage options to use to satisfy ARRA's
requirement to give notice of this option.
A form for an individual to use to satisfy ARRA's
requirement to notify the plan (or issuer) that the individual is
eligible for other group health plan coverage or Medicare.
COBRA election forms and information, as appropriate.
b. General Notice
Plans that are subject to the COBRA continuation provisions under
Federal law are required to send the General Notice.\2\ It must include
the information described above and be provided to all qualified
beneficiaries, not just covered employees, who experience a qualifying
event through March 31, 2010.\3\
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\2\ Under ARRA, as amended, the Secretary generally is
responsible for developing all of the model notices with the
exception of model notices relating to Temporary Continuation
Coverage under 5 U.S.C. 8905a, which is the responsibility of the
Office of Personnel Management (OPM). In developing the original
ARRA model notices, the Department was required to, and did, consult
with the Departments of the Treasury and Health and Human Services,
OPM, the National Association of Insurance Commissioners, and plan
administrators and other entities responsible for providing COBRA
continuation coverage. This set of models was again created in
consultation with staff at the Departments of the Treasury and
Health and Human Services.
\3\ This notice need not be provided to the extent that a notice
including accurate information regarding rights under ARRA has
already been provided.
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The Department has modified the previously updated version of this
model notice so that it includes all of the information related to the
premium reduction and other rights and obligations under ARRA, as
further amended by TEA. This model also includes all of the information
required in an election notice required pursuant to the Department's
final COBRA notice regulations under 29 CFR 2590.606-4(b).\4\ Using
this model to provide notice to individuals who have experienced any
qualifying event from September 1, 2008 through March 31, 2010 will
satisfy the Department's existing requirements for the content of the
COBRA election notice as well as those imposed by ARRA, as amended.
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\4\ The 60-day period for electing COBRA continuation coverage
is measured from when a complete notice is provided. ARRA provides
that COBRA election notices provided for qualifying events occurring
during the effective dates of the premium reduction period are not
complete if they fail to include information on the availability of
the premium reduction.
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c. Alternative Notice
Issuers that offer group health insurance coverage that is subject
to comparable continuation coverage requirements imposed by State law
must provide the Alternative Notice. The Alternative Notice must
include the information described above and be provided to ALL
qualified beneficiaries, not just covered employees, who have
experienced a qualifying event through March 31, 2010.\5\ The
Department has modified the previously updated version of this model
notice. However, because continuation coverage requirements vary among
States, it should be further modified to reflect the requirements of
the applicable State law. Issuers of group health insurance coverage
subject to this notice requirement should feel free to use the model
Alternative Notice, the model Notice of New Election Period, the model
Supplemental Information Notice, the model Notice of Extended Election
Period, or the model General Notice (as appropriate).
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\5\ See note 3 above.
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d. Notice of New Election Period
The Notice of New Election Period is required to be sent by plans
that are subject to COBRA continuation provisions under Federal or
State law. It must include the information described above and should
be provided to all individuals who:
Experienced a qualifying event that was a reduction in
hours at any time from September 1, 2008 through March 31, 2010;
Experienced a termination of employment at any point from
March 2, 2010 through March 31, 2010; AND
Either did not elect COBRA continuation coverage when it
was first offered OR who elected but subsequently discontinued COBRA.
Individuals who experience an involuntary termination of employment
after experiencing a qualifying event that consists of a reduction of
hours MUST be provided this notice within 60 days of the termination of
employment. The Department has created a model Notice of New Election
Period. Using this model to provide notice to these individuals
satisfies the requirements of ARRA, as amended by TEA.
e. Supplemental Information Notice
The Supplemental Information Notice is required to be sent by plans
that are subject to COBRA continuation provisions under Federal or
State law. It must include the information described above and should
be provided to all individuals who elected and maintained COBRA
continuation coverage based on the following qualifying events:
Terminations of employment that occurred at some time on
or after March 1, 2010 for which notice of the availability of the
premium reduction available under ARRA was not given; or
Reductions of hours that occurred during the period from
September 1, 2008 through March 31, 2010 which were followed by a
termination of the employee's employment that occurred on or after
March 2, 2010 and by March 31, 2010.
[[Page 13597]]
Individuals who experience an involuntary termination of employment
after experiencing a qualifying event that consists of a reduction of
hours MUST be provided this notice within 60 days of the termination of
employment. Individuals with qualifying events that occurred at some
time on or after March 1, 2010 for which notice of the availability of
the premium reduction available under ARRA was not given MUST be
provided this notice before the end of the required time period for
providing a COBRA election notice.\6\ The Department has created a
model Supplemental Information Notice. Using this model to provide
notice to these individuals satisfies the requirements of ARRA, as
amended by TEA.
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\6\ ARRA section 3001(a)(7) provides that COBRA election notices
provided for qualifying events occurring during the effective dates
of the premium reduction program are not complete if they fail to
include information on the availability of the premium reduction.
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f. Notice of Extended Election Period
The Notice of Extended Election Period is required to be sent by
plans that are subject to COBRA continuation provisions under Federal
or State law. It must include the information described above and be
provided to ALL individuals who experienced a qualifying event that was
a termination of employment at some time on or after March 1, 2010,
were provided notice that did not inform them of their rights under
ARRA, as amended by TEA, and either chose not to elect COBRA
continuation coverage at that time OR elected COBRA but subsequently
discontinued that coverage. This notice MUST be provided before the end
of the required time period for providing a COBRA election notice.\7\
The Department has created a model Notice of Extended Election Period.
Using this model to provide notice to these individuals satisfies the
requirements of ARRA, as amended by TEA.
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\7\ See note 6 above.
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III. For Additional Information
For additional information about ARRA's COBRA premium reduction
provisions as amended by TEA, contact the Department's Employee
Benefits Security Administration's Benefits Advisors at 1-866-444-3272.
In addition, the Employee Benefits Security Administration has
developed a dedicated COBRA Web page http://www.dol.gov/COBRA that will
contain information on the program as it is developed. Subscribe to
this page to get up-to-date fact sheets, FAQs, model notices, and
applications.
IV. Paperwork Reduction Act Statement
According to the Paperwork Reduction Act of 1995 (Pub. L. 104-13)
(PRA), no persons are required to respond to a collection of
information unless such collection displays a valid Office of
Management and Budget (OMB) control number. The Department notes that a
Federal agency cannot conduct or sponsor a collection of information
unless it is approved by OMB under the PRA, and displays a currently
valid OMB control number; further, the public is not required to
respond to a collection of information unless it displays a currently
valid OMB control number. See 44 U.S.C. 3507. Also, notwithstanding any
other provisions of law, no person shall be subject to penalty for
failing to comply with a collection of information if the collection of
information does not display a currently valid OMB control number. See
44 U.S.C. 3512.
OMB has approved the Department's no-material, non-substantive
change request for the updated notices under OMB Control Number 1210-
0123. The public reporting burden for this collection of information is
estimated to average approximately 3 minutes per respondent, including
time for gathering and maintaining the data needed to complete the
required disclosure. There is also an additional $0.44 average cost per
response for mailing costs. Interested parties are encouraged to send
comments regarding the burden estimate or any other aspect of this
collection of information, including suggestions for reducing this
burden, to the U.S. Department of Labor, Office of the Chief
Information Officer, Attention: Departmental Clearance Officer, 200
Constitution Avenue, NW., Room N-1301, Washington, DC 20210 or e-mail
[email protected] and reference the OMB Control Number 1210-
0123.
V. Models
The Department has decided to make the model notices available in
modifiable, electronic form on its Web site: http://www.dol.gov/COBRA.
VI. Statutory Authority
Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1169; Sec. 3001,
Pub. L. 111-5, 123 Stat. 115; Sec. 1010, Pub. L. 111-118, 123 Stat.
3409; Sec. 3, Pub. L. 111-144, 124 Stat. 42; and Secretary of
Labor's Order 6-2009, 74 FR 21524 (May 7, 2009).
Signed at Washington, DC this 15th day of March 2010.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration.
[FR Doc. 2010-6174 Filed 3-19-10; 8:45 am]
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