[Federal Register Volume 75, Number 10 (Friday, January 15, 2010)]
[Notices]
[Pages 2562-2563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-752]


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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 Amended by the Department of Defense Appropriations Act, 
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 amended.

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SUMMARY: On December 19, 2009, President Obama signed the Department of 
Defense Appropriations Act, 2010 (Pub. L. 111-118), which extended the 
availability of the health care continuation coverage premium reduction 
provided for COBRA and other health care continuation coverage as 
required by the American Recovery and Reinvestment Act (ARRA) of 2009 
(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 amended.

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 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 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 February 28, 2010 if he or she elects such 
COBRA coverage.
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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 developed by the Department 
originally under ARRA, 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 
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

    The amended 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 experience a 
qualifying event through February 28, 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 is an update of the 
originals and was created in consultation with staff at the 
Departments of the Treasury and Health and Human Services.
    \3\ In the event of a qualifying event that occurs prior to the 
2010 DOD Act's December 19, 2009 date of enactment, this notice need 
not be provided to the extent that proper notice has already been 
provided. However, in cases where the qualifying event was a 
termination of employment, the Premium Assistance Extension Notice 
may be used to satisfy the statutory requirement to notify 
individuals of their new rights under ARRA, as amended.
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    The Department has updated the earlier version of this model notice 
so that it includes all of the information related to the premium 
reduction and

[[Page 2563]]

other rights and obligations under ARRA, as amended. 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 February 28, 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 that are 
related to a termination 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

    The amended Alternative Notice is required to be sent by issuers 
that offer group health insurance coverage that is subject to 
comparable 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 through February 28, 2010.\5\ 
The Department updated the earlier version of this model notice. 
However, because continuation coverage requirements vary among States 
it 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 model General Notice (as appropriate).
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    \5\ See note 3 above.
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d. Premium Assistance Extension Notice

    The Premium Assistance Extension Notice is required to be sent by 
plans and other entities that are subject to continuation of health 
coverage provisions under either Federal or State law. This notice 
serves several purposes. It serves as a notice of the extension of the 
premium assistance from nine to 15 months for individuals who were 
receiving premium assistance as of October 31, 2009. It also provides 
this information to individuals who became Assistance Eligible 
Individuals, or who experienced a qualifying event that was the 
termination of a covered employee's employment, between October 31, 
2009 and December 19, 2009, but who were provided a notice that did not 
include the information required by ARRA, as amended by the Department 
of Defense Appropriations Act, 2010.\6\ Notices for these individuals 
must be provided by February 17, 2010, which is 60 days from the 
December 19, 2009 date of enactment. Additionally, this notice may be 
used to notify individuals who are in a ``transition period'' of their 
new right to make a retroactive, reduced payment. The transition period 
is the first period of coverage for which the premium assistance would 
apply due to the extension from nine to 15 months. These individuals 
have received the full nine months of premium assistance required under 
ARRA and either did not make any payment for subsequent periods of 
coverage, made a payment of 35% (or any amount that is less than 100% 
of the full premium), or made a payment of the full premium otherwise 
required to maintain coverage absent the subsidy. The notice must be 
provided to these individuals within the first 60 days of their 
transition period. The Department has created a single model notice 
that can be used in any of the above circumstances.
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    \6\ Generally, individuals do not need to receive two notices; 
if they are one of the two classes of individuals described in this 
paragraph and receive the Premium Assistance Extension Notice, they 
do not need to receive the General Notice as well.
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III. For Additional Information

    For additional information about ARRA's COBRA premium reduction 
provisions as amended by the Department of Defense Appropriations Act, 
2010, 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.
    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 3 
minutes per respondent, including time for gathering and maintaining 
the data needed to complete the required disclosure. There is also an 
additional $0.39 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, 1191c; Pub. L. 
111-5, 123 Stat. 115, sec. 3001(a)(5), 3001(a)(2)(C), 3001(a)(7); Pub. 
L. 111-118, 123 Stat. 3409; and Secretary of Labor's Order No. 6-2009, 
74 FR 21524 (May 7, 2009).

    Signed at Washington, DC, this 12th day of January 2010.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration.
[FR Doc. 2010-752 Filed 1-14-10; 8:45 am]
BILLING CODE 4510-29-P