COBRA Notification Requirements--American Recovery and Reinvestment Act of 2009 as amended by Department of Defense Appropriations Act, 2010

M odel Continuation Coverage Election Notice

(For use where coverage is subject to State continuation coverage requirements during the period that begins with September 1, 2008 and ends with February 28, 2010.)

[Enter date of notice]

Dear: [Identify the qualified beneficiary(ies), by name or status]

This notice contains important information about your right to continue your health care coverage in the [enter name of group health plan] (the Plan). Please read the information contained in this notice very carefully.

The American Recovery and Reinvestment Act of 2009 (ARRA), as amended, reduces the amount you will owe for continuation coverage premium in some cases. Individuals who are receiving this election notice in connection with a loss of coverage that occurred during the period that begins with September 1, 2008 and ends with February 28, 2010 may be eligible for the temporary premium reduction for up to 15 months. To help determine whether you can get the ARRA premium reduction, you should read this notice and the attached documents carefully. In particular, reference the “Summary of the Continuation Coverage Premium Reduction Provisions under ARRA, as Amended” with details regarding eligibility, restrictions, and obligations and the “Application for Treatment as an Assistance Eligible Individual.” If you believe you meet the criteria for the premium reduction, complete the “Application for Treatment as an Assistance Eligible Individual” and return it with your completed Election Form.

To elect continuation coverage, follow the instructions on the following pages to complete the enclosed Election Form and submit it to us.

If you do not elect continuation coverage, your coverage under the Plan will end on [enter date] due to [check appropriate box(es)]:

£ End of employment

£ Involuntary £ Voluntary

[Add any other events that would give rise to a right to continuation coverage under state law, such as

£ Divorce or legal separation

£ Death of employee

£ Entitlement to Medicare

£ Reduction in hours of employment

£ Loss of dependent child status]

Each person in the category(ies) checked below is entitled to elect continuation coverage, which will continue group health care coverage under the Plan for up to ___ months [enter appropriate timeframe]

[Add appropriate categories and check appropriate box or boxes. Categories may include

£ Employee or former employee

£ Spouse or former spouse

£ Dependent child(ren) covered under the Plan on the day before the event that caused

the loss of coverage

£ Child who is losing coverage under the Plan because he or she is no

longer a dependent under the Plan ]

If elected, continuation coverage will begin on [enter date] and can last until [enter date].

[Add, if appropriate: You may elect any of the following options for continuation coverage: [list available coverage options].

[If the issuer permits Assistance Eligible Individuals to elect to enroll in coverage that is different than coverage in which the individual was enrolled at the time the qualifying event occurred, insert: “To change the coverage option(s) for your continuation coverage to something different than what you had on the last day of employment, complete the “Form for Switching Continuation Coverage Benefit Options” and return it to us. Available coverage options are: [insert list of available coverage options].” The different coverage must cost the same or less than the coverage the individual had at the time of the qualifying event; be offered to active employees; and cannot be limited to only dental coverage, vision coverage, counseling coverage, a flexible spending arrangement (FSA), including a health reimbursement arrangement that qualifies as an FSA, or an on-site medical clinic. ]

Continuation coverage will cost: [enter amount each qualified beneficiary will be required to pay for each option per month of coverage and any other permitted coverage periods]. If you qualify as an “Assistance Eligible Individual” this cost can be reduced to [include the amount that is 35 percent of the amount above for each option] for up to 15 months. [Indicate whether any payment is due with the Election Form under State law.] Important additional information about payment for continuation coverage is included in the pages following the Election Form.

If you have any questions about this notice or your rights to continuation coverage, you should contact [enter name of party responsible for continuation coverage administration for the issuer, with telephone number and address].

Continuation Coverage Election Form

Instructions: To elect continuation coverage, complete this Election Form and return it to us. Under [insert applicable law], you have [insert number of days] after the date of this notice to decide whether you want to elect continuation coverage.

Send completed Election Form to: [Enter Name and Address]

This Election Form must be completed and returned by mail [or describe other means of submission and due date]. If mailed, it must be post-marked no later than [enter date].

If you do not submit a completed Election Form by the due date shown above, you will lose your right to elect continuation coverage. [Add the following if appropriate or change to reflect State law. “If you reject continuation coverage before the due date, you may change your mind as long as you furnish a completed Election Form before the due date. However, if you change your mind after first rejecting continuation coverage, your continuation coverage will begin on the date you furnish the completed Election Form.”]

Read the important information about your rights included in the pages after the Election Form.

I (We) elect continuation coverage in the [enter name of plan] (the Plan) as indicated below:

Name Date of Birth Relationship to Employee SSN (or other identifier)

a. _________________________________________________________________________

[Add if appropriate: Coverage option(s): _______________________________]

b. _________________________________________________________________________

[Add if appropriate: Coverage option(s): _______________________________]

c. _________________________________________________________________________

[Add if appropriate: Coverage option(s): _______________________________]

_____________________________________ _____________________________

Signature Date

______________________________________ _____________________________

Print Name Relationship to individual(s) listed above

______________________________________

______________________________________

______________________________________ ______________________________

Print Address Telephone number

[Only use this model form if the plan permits Assistance Eligible Individuals to elect to enroll in coverage that is different than coverage in which the individual was enrolled at the time the qualifying event occurred.]

F

Instructions: To change the benefit option(s) for your continuation coverage to something different than what you had on the last day of employment, complete this Form and return it to us. Under federal law, you have 90 days after the date of this notice to decide whether you want to switch benefit options.

Send completed Form to: [Enter Name and Address]

This Form must be completed and returned by mail [or describe other means of submission and due date]. If mailed, it must be post-marked no later than [enter date].

*THIS IS NOT YOUR ELECTION NOTICE*

YOU MUST SEPARATELY COMPLETE AND RETURN THE ELECTION NOTICE TO SECURE YOUR CONTINUATION COVERAGE.

orm for Switching Continuation Coverage Benefit Options

I (We) would like to change the continuation coverage option(s) in the [enter name of plan] (the Plan) as indicated below:

Name Date of Birth Relationship to Employee SSN (or other identifier)

a. _________________________________________________________________________

Old Coverage Option: ____________________________

New Coverage Option: __________________________

b. _________________________________________________________________________

Old Coverage Option: ____________________________

New Coverage Option: __________________________

c. _________________________________________________________________________

Old Coverage Option: ____________________________

New Coverage Option: __________________________

_____________________________________ _____________________________

Signature Date

______________________________________ _____________________________

Print Name Relationship to individual(s) listed above

______________________________________

______________________________________

______________________________________ ______________________________

Print Address Telephone number

Important Information about Your Continuation Coverage Rights

What is continuation coverage?

State law requires [insert state law requirements here], for example: that most group health insurance coverage (including this coverage) give employees and their families the opportunity to continue their coverage when there is a “qualifying event” that would result in a loss of coverage under an employer’s plan. Depending on the type of qualifying event, “qualified beneficiaries” can include the employee (or retired employee) covered under the group health plan, the covered employee’s spouse, and the dependent children of the covered employee.

Continuation coverage is the same coverage that the Plan gives to other participants or beneficiaries under the Plan who are not receiving continuation coverage. Each qualified beneficiary who elects continuation coverage will have the same rights under the Plan as other participants or beneficiaries covered under the Plan, including [add if applicable: open enrollment and] special enrollment rights.]

How long will continuation coverage last?

[Insert length of coverage and any other relevant information including the availability of any extensions under state law.]

How can you elect continuation coverage?

To elect continuation coverage, you must complete the Election Form and furnish it according to the directions on the form. [Insert information about any other state law provisions relevant to the election process, including the rights of family members.]

In considering whether to elect continuation coverage, you should take into account that a failure to continue your group health coverage will affect your future rights under federal law. First, you can lose the right to avoid having preexisting condition exclusions applied to you by other group health plans if you have a 63-day gap in health coverage, and election of continuation coverage may help prevent such a gap. Second, you will lose the guaranteed right to purchase individual health coverage that does not impose a preexisting condition exclusion if you do not elect continuation coverage for the maximum time available to you. Finally, you should take into account that you have special enrollment rights under federal law. You have the right to request special enrollment in another group health plan for which you are otherwise eligible (such as a plan sponsored by your spouse’s employer) within 30 days after your group health coverage ends because of the qualifying event listed above. You will also have the same special enrollment right at the end of continuation coverage if you get continuation coverage for the maximum time available to you.

How much does continuation coverage cost?

[Insert general information regarding the cost of continuation coverage.]

The American Recovery and Reinvestment Act of 2009 (ARRA), as amended by the Department of Defense Appropriations Act, 2010, reduces the continuation coverage premium in some cases. The premium reduction is available to certain individuals who experience a qualifying event relating to continuation coverage that is an involuntary termination of employment during the period beginning with September 1, 2008 and ending with February 28, 2010. If you qualify for the premium reduction, you need only pay 35 percent of the continuation coverage premium otherwise due to the plan. This premium reduction is available for up to 15 months. If your continuation coverage lasts for more than 15 months, you will have to pay the full amount to continue your coverage. See the attached “Summary of the Continuation Coverage Premium Reduction Provisions under ARRA, as Amended” for more details, restrictions, and obligations as well as the form necessary to establish eligibility.

[If employees might be eligible for trade adjustment assistance, the following information must be added: The Trade Act of 2002 created a tax credit for certain individuals who become eligible for trade adjustment assistance and for certain retired employees who are receiving pension payments from the Pension Benefit Guaranty Corporation (PBGC). Under the tax provisions, eligible individuals can either take a tax credit or get advance payment of 65% of premiums paid for qualified health insurance, including continuation coverage. ARRA made several amendments to these provisions, including an increase in the amount of the credit to 80% of premiums for coverage before January 1, 2011 and temporary extensions of the maximum period of COBRA continuation coverage for PBGC recipients (covered employees who have a nonforfeitable right to a benefit any portion of which is to be paid by the PBGC) and TAA-eligible individuals.

If you have questions about these provisions, you may call the Health Coverage Tax Credit Customer Contact Center toll-free at 1-866-628-4282. TTD/TTY callers may call toll-free at 1-866-626-4282. More information about the Trade Act is also available at www.doleta.gov/tradeact.]

When and how must payment for continuation coverage be made?

[Insert information regarding the requirements related to payment for continuation coverage, including any periodic payment provisions or permissible grace periods.]

You may contact [enter appropriate contact information for the party responsible for continuation coverage administration under the Plan] to confirm the correct amount of your first payment or to discuss payment issues related to the ARRA premium reduction.

Your payment(s) for continuation coverage should be sent to:

[enter appropriate payment address]

For more information

This notice does not fully describe continuation coverage or other rights with respect to your coverage. More information is available from [enter appropriate contact information for the party responsible for continuation coverage administration under the Plan].

If you have any questions concerning the information in this notice, your rights to coverage you should contact [enter name of party responsible for continuation coverage administration for the Plan, with telephone number and address].

For more information about your rights under state law, contact [insert appropriate contact information.]

Keep Your Plan Informed of Address Changes

In order to protect your and your family’s rights, you should keep [enter name and contact information for the appropriate party responsible for continuation coverage administration under the Plan] informed of any changes in your address and the addresses of family members. You should also keep a copy, for your records, of any notices you send to [enter the name of the party responsible for continuation coverage administration under the Plan].

S ummary of the Continuation Coverage Premium

Reduction Provisions under ARRA, as Amended

President Obama signed the American Recovery and Reinvestment Act (ARRA) on February 17, 2009. On December 19, 2009, the President signed the Department of Defense Appropriations Act, 2010. These laws give “Assistance Eligible Individuals” the right to pay reduced continuation coverage premiums for periods of coverage beginning on or after February 17, 2009 and can last up to 15 months.

To be considered an “Assistance Eligible Individual” and get reduced premiums you:

• MUST have a continuation coverage election opportunity related to an involuntary termination of employment that occurred at any time from September 1, 2008 through February 28, 2010;

• MUST elect the coverage;

• MUST NOT be eligible for Medicare; AND

• MUST NOT be eligible for coverage under any other group health plan, such as a plan sponsored by a successor employer or a spouse’s employer.^

Individuals whose 9 month premium reduction ended also have an opportunity to make a payment to continue coverage at the reduced rates. These payments must be made by February 17, 2010 or, if later, within 30 days from receipt of the notice regarding the ARRA amendment that extended the premium reduction to 15 months.

 IMPORTANT 

◊ If, after you elect continuation coverage and while you are paying the reduced premium, you become eligible for other group health plan coverage or Medicare you MUST notify the plan in writing. If you do not, you may be subject to a tax penalty.

◊ Electing the premium reduction disqualifies you for the Health Coverage Tax Credit. If you are eligible for the Health Coverage Tax Credit, which could be more valuable than the premium reduction, you will have received a notification from the IRS.

◊ The amount of the premium reduction is recaptured for certain high income individuals. If the amount you earn for the year is more than $125,000 (or $250,000 for married couples filing a joint federal income tax return) all or part of the premium reduction may be recaptured by an increase in your income tax liability for the year. If you think that your income may exceed the amounts above, you may wish to consider waiving your right to the premium reduction. For more information, consult your tax preparer or visit the IRS webpage on ARRA at www.irs.gov.

For general information regarding your plan’s continuation coverage you can contact [enter name of party responsible for continuation coverage administration for the Plan, with telephone number and address].

For specific information related to your plan’s administration of the ARRA Premium Reduction or to notify the plan of your ineligibility to continue paying reduced premiums, contact [enter name of party responsible for ARRA Premium Reduction administration for the Plan, with telephone number and address].

If you are denied treatment as an “Assistance Eligible Individual” you may have the right to have the denial reviewed. For more information regarding reviews or for general information about the ARRA Premium Reduction go to:

www.ContinuationCoverage.net or call (866) 400-6689

To apply for ARRA Premium Reduction, complete this form and return it to us along with your Election Form.

You may also send this form in separately. If you choose to do so, send the completed “Request for Treatment as an Assistance Eligible Individual” to: [Enter Name and Address]

You may also want to read the important information about your rights included in the “Summary of the Continuation Coverage Premium Reduction Provisions Under ARRA, as Amended.”

[Insert Plan Name]	REQUEST FOR TREATMENT AS AN ASSISTANCE ELIGIBLE INDIVIDUAL		[Insert Plan Mailing Address]
PERSONAL INFORMATION
Name and mailing address of employee (list any dependents on the back of this form)		Telephone number
		E-mail address (optional)
To qualify, you must be able to check ‘Yes’ for all statements.
1. The loss of employment was involuntary.				 Yes No
2. The loss of employment occurred at some point on or after September 1, 2008 and on or before February 28, 2010.				 Yes No
3. I elected (or am electing) continuation coverage.				 Yes No
4. I am NOT eligible for other group health plan coverage (or I was not eligible for other group health plan coverage during the period for which I am claiming a reduced premium).				 Yes No
5. I am NOT eligible for Medicare (or I was not eligible for Medicare during the period for which I am claiming a reduced premium).				 Yes No
I make an election to exercise my right to the ARRA Premium Reduction. To the best of my knowledge and belief all of the answers I have provided on this form are true and correct. S ignature __________________________________________________ Date ____________________________ T ype or print name __________________________________________ Relationship to employee _________________________
FOR ISSUER USE ONLY This application is:  Approved  Denied  Approved for some/denied for others (explain in #4 below) Specify reason below and then return a copy of this form to the applicant. REASON FOR DENIAL OF TREATMENT AS AN ASSISTANCE ELIGIBLE INDIVIDUAL
1. Loss of employment was voluntary.					
2. The involuntary loss did not occur between September 1, 2008 and February 28, 2010.					
3. Individual did not elect continuation coverage.					
4. Other (please explain)					
Signature of party responsible for continuation coverage administration for the Plan _ _________________________________________________ Date ____________________________ T ype or print name _____________________________________________________________________________ T elephone number ____________________________ E-mail address ____________________________

DEPENDENT INFORMATION (Parent or guardian should sign for minor children.)

Name Date of Birth Relationship to Employee SSN (or other identifier)

a. _________________________________________________________________________

1. I elected (or am electing) continuation coverage.	 Yes No
2. I am NOT eligible for other group health plan coverage.	 Yes No
3. I am NOT eligible for Medicare.	 Yes No

I make an election to exercise my right to the ARRA Premium Reduction. To the best of my knowledge and belief all of the answers I have provided on this form are true and correct.

S ignature __________________________________________________ Date ____________________________

T ype or print name __________________________________________ Relationship to employee _________________________

Name Date of Birth Relationship to Employee SSN (or other identifier)

b. _________________________________________________________________________

1. I elected (or am electing) continuation coverage.	 Yes No
2. I am NOT eligible for other group health plan coverage.	 Yes No
3. I am NOT eligible for Medicare.	 Yes No

I make an election to exercise my right to the ARRA Premium Reduction. To the best of my knowledge and belief all of the answers I have provided on this form are true and correct.

S ignature __________________________________________________ Date ____________________________

T ype or print name __________________________________________ Relationship to employee _________________________

Name Date of Birth Relationship to Employee SSN (or other identifier)

c. _________________________________________________________________________

1. I elected (or am electing) continuation coverage.	 Yes No
2. I am NOT eligible for other group health plan coverage.	 Yes No
3. I am NOT eligible for Medicare.	 Yes No

I make an election to exercise my right to the ARRA Premium Reduction. To the best of my knowledge and belief all of the answers I have provided on this form are true and correct.

S ignature __________________________________________________ Date ____________________________

T ype or print name __________________________________________ Relationship to employee _________________________

This form is designed for issuers to distribute to qualified beneficiaries who are paying reduced premiums pursuant to ARRA so they can notify the issuer if they become eligible for other group health plan coverage or Medicare.

Use this form to notify your issuer that you are eligible for other group health plan coverage or Medicare.

Plan Name	Participant Notification		Plan Mailing Address
PERSONAL INFORMATION
Name and mailing address		Telephone number
		E-mail address (optional)
PREMIUM REDUCTION INELIGIBILITY INFORMATION – Check one
I am eligible for coverage under another group health plan. If any dependents are also eligible, include their names below. Insert date you became eligible______________________				 
I am eligible for Medicare. Insert date you became eligible______________________				 
IMPORTANT If you fail to notify your issuer of becoming eligible for other group health plan coverage or Medicare AND continue to pay reduced continuation coverage premiums you could be subject to a fine of 110% of the amount of the premium reduction. Eligibility is determined regardless of whether you take or decline the other coverage. However, eligibility for coverage does not include any time spent in a waiting period.
To the best of my knowledge and belief all of the answers I have provided on this form are true and correct. S ignature __________________________________________________ Date ____________________________ T ype or print name _____________________________________________________________________________

If you are eligible for coverage under another group health plan and that plan covers dependents you must also list their names here:

_________________________________________ _________________________________________

_________________________________________ _________________________________________

 Generally, this does not include coverage for only dental, vision, counseling, or referral services; coverage under a health flexible spending arrangement; or treatment that is furnished in an on-site medical facility maintained by the employer.