Detailed COBRA Update            

The US Department of Labor released guidelines for employers on how to implement federal subsidies included in the economic stimulus package to help newly unemployed workers cover the cost of health insurance premiums under COBRA on http://www.dol.gov/ebsa/cobra.html.  There are four model notices, including:

• General Notice (Full version), which is for beneficiaries who lost or will lose group coverage from September 1, 2008 through December 31, 2009.
• General Notice (Abbreviated version), which is for beneficiaries receiving unsubsidized COBRA.
• Notice in Connection with Extended Election Periods, which is for individuals who lost their jobs from September 1, 2008 through February 16, 2009.
• Alternative Notice, which describes the rights of individuals working in states with so-called mini-COBRA laws (those applying to employers with fewer than 20 employees) to also receive COBRA subsidies.

Employers have until April 18, 60 days after the enactment of the stimulus package, to inform potentially eligible workers of their options regarding COBRA assistance. Employers also must notify potentially eligible former workers who initially declined coverage under COBRA. 

Those eligible will have until June 16 to decide whether they will use the subsidies. Former employees who apply to their group health plan for the subsidy and are denied coverage can appeal their denial directly to DOL.

Employers with fewer than 20 employees

Many New Jersey employees work for employers that are not subject to federal COBRA because the employer employs fewer than 20 employees. 

However, New Jersey law (N.J.S.A. 17B:27A-27) provides for continuation that is comparable to COBRA so the ARRA applies to employees of New Jersey small employers as well. 

Generally, the workers eligible for state COBRA extension laws also qualify for the subsidy. To learn more, visit: http://www.state.nj.us/dobi/division_consumers/insurance/arra.html.