[Federal Register Volume 74, Number 53 (Friday, March 20, 2009)]
[Notices]
[Pages 11971-11973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6131]


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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, 
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.

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SUMMARY: On February 17, 2009, President Obama signed the American 
Recovery and Reinvestment Act (ARRA) of 2009 (Pub. L. 111-5). ARRA 
includes a 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, 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.

FOR FURTHER INFORMATION CONTACT: Kevin Horahan or Amy Turner, 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 COBRA continuation provisions are subject 
to ARRA's premium reduction provisions, notice requirements, and an 
additional election period. The 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 who 
provide group health insurance coverage to plans not subject to the 
COBRA continuation provisions to provide comparable continuation 
coverage. Such continuation coverage provided pursuant to State law is 
also subject to ARRA's premium reduction provisions and notice 
requirements but not the additional election period.

II. Description of the Model Notices

a. In General
    ARRA mandates the provision of three notices--a ``General Notice,'' 
an ``Alternative Notice,'' and a ``Notice in Connection with Extended 
Election Periods.'' 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

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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. The Notice 
in Connection with Extended Election Periods must also include a 
description of the extended election period.
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    \1\ In general, an ``Assistance Eligible Individual'' is an 
individual who is eligible for COBRA continuation coverage as a 
result of an involuntary termination of employment at any time from 
September 1, 2008 through December 31, 2009; and who elects COBRA 
coverage (when first offered or during the additional election 
period).
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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 included all of the 
information required under ARRA while minimizing the burden imposed on 
group health plans and issuers, the Department created several 
packages. Each package is designed for a particular group of qualified 
beneficiaries and contains all of the information needed to satisfy the 
content requirements for ARRA's 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) who 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
    The General Notice is required to be sent by plans that are subject 
to the COBRA continuation provisions under Federal law.\2\ It must 
include the information described above and be provided to ALL 
qualified beneficiaries, not just covered employees, who have 
experienced a qualifying event at any time from September 1, 2008 
through December 31, 2009, regardless of the type of qualifying event.
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    \2\ Under ARRA 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 these notices, the Department has 
consulted 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.
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    The Department has created two versions of this notice. The 
abbreviated version is for individuals who have elected COBRA and are 
still covered after experiencing a qualifying event at some time on or 
after September 1, 2008 to advise them of the availability of the 
premium reduction and other rights and obligations under ARRA. The 
longer version includes all of the information related to the premium 
reduction and other rights and obligations under ARRA as well as 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).\3\ Providing the longer notice to individuals who have 
experienced a qualifying event from September 1, 2008 through December 
31, 2009 will satisfy the Department's existing requirements for the 
content of the COBRA election notice as well as those imposed by ARRA.
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    \3\ ARRA provides that COBRA election notices already provided 
for qualifying events occurring during this time period but which 
did not include information on the availability of the premium 
reduction are not complete. As such, the end of the 60-day period 
for electing COBRA continuation coverage is measured from when a 
complete notice is provided. Moreover, although under COBRA a timely 
election may require a plan to make coverage available retroactively 
to the date of the loss of coverage, ARRA provides no new 
requirement for a plan to allow an individual to elect COBRA 
continuation coverage for any period prior to the first coverage 
period beginning on or after February 17, 2009.
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c. Alternative Notice
    The Alternative Notice is required to be sent by issuers that offer 
group health insurance coverage that is subject to continuation 
coverage requirements imposed by State law. 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 at any time from September 1, 2008 
through December 31, 2009, regardless of the type of qualifying event. 
Continuation coverage requirements vary among States. Thus, the 
Department crafted a single version of this notice that should be 
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 or the 
abbreviated model General Notice (as appropriate).
d. Notice in Connection With Extended Election Periods
    The Notice in Connection with Extended Election Periods is required 
to be sent by plans that are subject to COBRA continuation provisions 
under Federal law. It must include the information described above and 
be provided to any Assistance Eligible Individual (or any individual 
who would be an Assistance Eligible Individual if a COBRA continuation 
coverage election were in effect) who: had a qualifying event at any 
time from September 1, 2008 through February 16, 2009; AND either did 
not elect COBRA continuation coverage or who elected but subsequently 
discontinued COBRA. This notice MUST be provided by April 18, 2009, 
which is 60 days after the date ARRA was enacted.\4\
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    \4\ ARRA could be read to require Assistance Eligible 
Individuals with qualifying events from September 1, 2008 through 
February 16, 2009 who are already enrolled in COBRA coverage to 
receive both a General Notice and a Notice in Connection with 
Extended Election Periods with duplicate content. Because the COBRA 
election information would be of no practical importance to 
individuals already enrolled, plans may send just the abbreviated 
General Notice to such individuals and satisfy both ARRA notice 
requirements if the 60-day time frame for providing the Notice in 
Connection with Extended Election Periods is satisfied.
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III. For Additional Information

    For additional information about ARRA's COBRA premium reduction 
provisions, 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, and 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

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display a currently valid OMB control number. See 44 U.S.C. 3512.
    This Notice revises the collections of information contained in the 
ICR titled Notice Requirements of the Health Care Continuation Coverage 
Provisions approved under OMB Control Number 1210-0123. OMB has 
approved this revision to the ICR pursuant to the emergency review 
procedures under 5 CFR 1320.13. The public reporting burden for this 
collection of information is estimated to average approximately 7 
minutes per respondent, including time for gathering and maintaining 
the data needed to complete the required disclosure. 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, 1191c; Public 
Law 111-5, 123 Stat. 115; sec. 3001(a)(5), 3001(a)(2)(C), 
3001(a)(7), and Secretary of Labor's Order No. 1-2003, 68 FR 5374 
(Feb. 3, 2003).

    Signed at Washington, DC this 17th day of March 2009.
Alan D. Lebowitz,
Deputy Assistant Secretary, Employee Benefits Security Administration.
[FR Doc. E9-6131 Filed 3-19-09; 8:45 am]
BILLING CODE 4510-29-P