Reductions in COBRA Premiums

1. Reductions in COBRA Premiums American Recovery & Reinvestment Act of 2009 (ARRA)

2. ARRA • American Recovery & Reinvestment Act of 2009 (ARRA) provides reductions in COBRA premiums for qualified individuals & additional election opportunities for qualified individuals • 65% reduction in COBRA premium costs – eligible individuals pay 35% of their premium • Effective for premium payments from 2/17/09 through 12/31/09

3. Eligibility • Who is eligible • Employees who were involuntarily terminated from employment and were eligible for COBRA continuation at anytime between 09/01/2008 and 12/31/2009 • Meet income limits, income less than $145,000 • Who is not eligible • Left employment voluntarily (e.g. resigned, quit) • Who become eligible for Medicare or other group health plan • COBRA benefits expired prior to September 1, 2008 • Eligible applicants will receive written notification regarding these changes from the plan administrator

4. Special COBRA Election Opportunity • Eligible individuals who did not elect COBRA when first offered or are no longer enrolled because they were unable to pay the premiums will be granted a new election period. • The election period starts on 02/17/2009 and will extend 60 days after the plan provides required notice

5. What can providers do? • Identify individuals who have been involuntarily terminated from their jobs during the specified time frame • Look for COBRA statements that change the premium payment amount or ask participants to provide any change notices received. • Make sure that when the nine month period of premium reduction is complete, the client returns to the full payment amount. Additional Information: www.dol.gov/ebsa/pdf/fsCOBRApremiumreduction.pdf