Questions Already Arising About Latest COBRA Changes
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Topics: arra, cobra, questions
President Obama signed an extension and expansion of the COBRA premium subsidy into law on December 19th, giving existing COBRA qualified beneficiaries who had qualified as Assistance Eligible Individuals (AEIs) an opportunity to receive as many as six months of additional premium subsidy, and providing new QBs with up to 15 months of the 65% subsidy.
The administrative requirements created by the new changes to COBRA are significant, though not as burdensome as the original ARRA renotification and subsidy administration requirements. As stated in previous blog posts, Travis began work on new releases of both TravisCobra and WebCOBRA.com prior to the passage of the new law, so that our customers could have new releases of the systems they can begin using by the end of 2009.
Several questions have come to us from system users about the new law and what provisions are going to be in the system versions we release. An earlier blog post on December 21st described the new letters to be found in the release, and this posting is intended to be a bit more detailed about some of the other features in the initial releases we make available to you.
Our goal is to make the renotifications and premium administration our users have to do in order to meet the requirements of this new law as automatic as possible. That’s why we’re including an Enrollment Form with the letter to QBs whose subsidy is exhausted and whose coverage has lapsed, telling them how much they need to pay and by when in order to reinstate their coverage. We’re also going to include a new set of payment coupons with the letter sent to those who are enrolled in COBRA and who now can either extend their existing subsidy up to six months or resume receiving it if their subsidy lapsed but they continued to pay the full premium.
One of the reasons we’re sending the new releases out by December 31, 2009, is so our users can send new COBRA Election Notices to new QBs reflecting the possible 15-month subsidy rather than the former 9-month one.
Also, some users have told us they want to send out the new letters immediately to those who may re-enroll in COBRA and those whose subsidy is ongoing but now extended. The letters for these actions are straightforward and will be included in our initial new releases. So if you want to print the notices ASAP to those who are eligible for re-enrollment, you will be able to do so. Sending the notices quickly will give the QBs the majority of the 60-day “window” specified in the law, which appears to end on February 19th based on the enactment date of the law.
Other of our users have said they don’t feel comfortable sending out any notices until the Department of Labor issues guidance and perhaps Model Notices for this new required correspondence. Our new releases can accommodate that opinion as well – the new notices will not print unless users initiate them.
However, the DOL has not yet indicated that they will produce Model Notices or guidance for this new law. If they do, Travis will modify our systems, as we did with the original ARRA law, and will include whatever Model Notices the DOL may issue.
The one issue that appears to need DOL guidance, and the one letter than may need a Model Notice in order for anyone to confidently send it to QBs, is the renotification letter required to be sent to those who had new COBRA qualifying events on or after October 31, 2009, letting them know that the subsidy is now 15 months rather than 9. The wording of the law is unclear as to whether any additional time is to be allowed a QB to make a decision about enrolling in COBRA as a result of the renotification requirement.
For example, if it’s January 10, 2010 and you are about to send a renotification to John Doe who had his original qualifying event on November 10, 2009, lost coverage that day and was notified on November 15th, do you really want to send him a renotification on Jan. 10th telling him he has only five more days, until January 15, 2010, to enroll, particularly after you gave him the new information about the longer period of subsidy? Some have told us they would send that notice and give only that five days of time; others have told us they would want to give a new 60-day election period to the QB, still others have told us they think it’s reasonable to provide 30 days for enrollment from the date of the notice.
There is risk in providing too little time for QBs to consider their options, to be sure, but there is also risk in providing too much time – if you offer a new 60-day enrollment window in the renotification letter in the case above and your insurance carrier (or stop-loss carrier, if you’re self-funded) doesn’t agree with the longer period of time for enrollment, the employer may end up self-funding some claims.
We have heard opinions on both sides of the argument that appear persuasive, but those arguments generally end with, “We need to hear from the DOL.”
Thankfully, the new law gives administrators some time to consider these questions. Rather than the hard-and-fast deadline for renotifications to be sent, as was the case with ARRA, the new law provides that premium payment for re-enrollment must be made within 60-days after the enactment date of the law or, if later, the QB must be given 30 days from the date the notice is sent to the QB.
We can only hope that the DOL provides some timely guidance to the unanswered questions already arising out of Congress’ actions. Travis will act with additional releases as soon as those questions are answered.
21 Responses to “Questions Already Arising About Latest COBRA Changes”
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December 23rd, 2009 at 02:07 PM
Is the AEI request for asistance form being updated to include the 2/28/2010 date of loss of employment? Page 2, Question number 2, “The loss of employment occurred at some point on or after September 1, 2008 and on or before December 31, 2009.”
December 23rd, 2009 at 03:49 PM
Will you also be updating the hidden DOL forms with the new dates? What is the possibility of opening these DOL forms up for administrators to edit?
December 28th, 2009 at 03:45 PM
@Kathy At this time, the DOL is not requiring that we have the “posters” we used last time, and there are no new posters, so far. At this point, they are just requiring that participants be notified of the changes. We will insert a form explaining all the changes. This will be editable.
December 29th, 2009 at 07:34 AM
Do you know how soon the QB’s that are already on the ARRA or just expired will have a new date for the ARRA to end showing the 6 month extention? At this time I am having to manaully update coupons and the accounting side, becuase the 65% is not being applied. Thanks!
December 29th, 2009 at 09:33 AM
@Daisy Yes, we will update information to reflect the new date of 2/28/2010.
December 29th, 2009 at 09:42 AM
@Adella The updates will be in the system by December 31.
December 29th, 2009 at 09:42 AM
@Adella The updates will be in the system by December 31.
December 29th, 2009 at 11:43 AM
1)Will the system pick up only PQB’s who have an event of 1-Termination or will it also pick up 6-Reduced Hours and 9-Loss of coverage when it scans to determine who needs to be renotified? 2)For those who had Qualifying Event Dates and COBRA Start Dates on or after 12/31/09 will the system automatically send out the New ARRA Extension information and a Request for Treatment Form or will they have to be manually added in? 3)Will there be a new report that can be ran for ARRA PQBs that shows the PQB, their ARRA start date and the ARRA end date?
Thanks.
December 30th, 2009 at 04:39 PM
@LaToya 1. You can select any event that you want the re-notification processs to pull. 2. There are new options located in the ARRA Options to turn on the new letters. This is one of those letters. With the option turned on, it will automatically print! 3. Not yet, but this would make a great enhancement request!
December 31st, 2009 at 11:22 AM
Will those that are already ARRA eligible and have lost the subsidy on 12/1 or 1/1 need to apply for the extension or will this just be applied to their account and a confirmation letter be sent with coupons?
December 31st, 2009 at 01:44 PM
Regarding LaToya’s question #2, what is the default setting in Travis? Is it set to automatically print the letter and you have to turn it off or is the default “off” and you have to turn it on.
December 31st, 2009 at 01:56 PM
In Travis the new extension letter 81 for those QBs who have terminated upon the end of their 9 months subsidy it states they will have until {M361} to make their retro premium payment. I cannot find in the Macro codes what date will be pulled into that letter.
January 4th, 2010 at 07:46 AM
How do we pull these re-notification letters for QB who’s ARRA expired in WebCOBRA? I do not see an option to automatically re-notify the QB.
January 4th, 2010 at 09:41 AM
Checked the new boxes for the ARRA extension but no letters printed out for the terminated employees who did not continue once their subsidy ran out on December 1. Why?
January 5th, 2010 at 09:00 AM
@Danielle once you turn on the options, the letters will auto generate. Once the Re-Notification Wizard is run, the ARRA Notice for Termed QBs will print.
January 5th, 2010 at 01:09 PM
@Sue Did you run the renotification process? That may be a great question for out Travis Support team. They can be contacted at 281.496.3737, and selecting option 3.
January 5th, 2010 at 01:11 PM
@Patrick If a QB is enrolled and has exhausted their original nine months subsidy, then once the appropriate letter option is turned on, then a letter will print letting the QB know of the extension.
January 5th, 2010 at 01:14 PM
@DeAnn {M361} equals the Date of Enactment+60 days OR Date the letter prints + 30 days- which ever is greater.
January 5th, 2010 at 01:16 PM
@DeAnn The default setting for the option that print the new letters is set to “OFF.” If you want these letters to print, please turn these options on. Thanks for the great questions!
January 5th, 2010 at 01:36 PM
How do you turn on the options? I see no setting in WebCOBRA for this. Please explain.
January 7th, 2010 at 04:40 PM
The options are located under Cobra Election Notice Letter Set Options.