Travis Software Official Blog

While Congress is considering extending the COBRA Premium subsidy provided by ARRA there remains the possibility that January 1, 2010 will come and go without ARRA being extended. If no extension is enacted, those who have qualifying events in 2010 will not be eligible to become Assistance Eligible Individuals (AEIs) under ARRA, as ARRA only provides for subsidy for those who have qualifying events between September 1, 2008 and December 31, 2009.

Each employer or administrator should be thinking about how you want to administer a “wrinkle” in the ARRA law concerning people who have qualifying events late in 2009 and whose “First Day After Loss of Coverage” is January 1, 2010 or later. There are many who believe that those who have their qualifying event late in 2009, or even on December 31,2009, but their “First Day After Loss of Coverage” is January 1, 2010 or later, are not eligible to become “AEIs” and receive subsidy assistance. Other employers and administrators believe that as long as the qualifying event date is on or before December 31, 2009, the person is eligible for the subsidy. There has been guidance from the Department of Labor on this question, but administrators are left to decide how to address the issue.

As 2009 draws to a close, we wanted to give TravisCobra and WebCOBRA.com users some information about what is already in our COBRA systems with respect to transitioning out of ARRA, and about how to set up the systems to meet your interpretation when the First Day After Loss of Coverage is in 2010. First, both the current version of TravisCobra (Series 8.5.0.03) and the current production version of WebCOBRA.com have been programmed to stop including wording, forms, etc. in the COBRA Election Notice package concerning ARRA, and stop mentioning the possibility of a qualifying beneficiary becoming an AEI, if the qualifying event date is January 1, 2010 or later. TravisCobra users should make sure they are on Release 8.5.0.03 and if they are not, please contact TravisSupport to get help downloading and installing that version. WebCOBRA.com users are always on the most current version of the system and need to do nothing.

If the qualifying event date for a new QB is during the latter part of 2009 and the “First Day After Loss of Coverage” is 1/1/2010 or later, then the systems have “Custom Options” you can set to fit your interpretation of the law. Administrators using multi-employer versions of TravisCobra and WebCOBRA.com can set this option globally for all employers or may set it on an employer-by-employer basis.

If you are using TravisCobra, you can go to the “PQB Options” screen and select the appropriate ARRA Option that fits your interpretation of the law. For example, if you want to notify PQBs with event dates in December, 2009 but loss of coverage in 2010 that they are eligible to become an AEI, you would check the third box that says, “Allow ARRA for PQBs with an Event Date Between September 2008 and December 2009 which will result in a First Day After LOC in 2010”. If you do not want to give those PQBs the opportunity to become AEIs, you would not check that box.

If you are using WebCOBRA.com, you would navigate to “Client Options – Processing Options” and select/deselect the option on that page that has the same description as mentioned just above, depending on your interpretation of the law.

Both systems will continue to help you administer the ARRA subsidies for existing AEIs during their nine-month subsidy term as we move into 2010. So, for example, if someone had a qualifying event on September 30, 2009 and was qualified to be an AEI, the systems will account for their subsidy through June, 2010. Anyone with a qualifying event date in 2010 will not be provided wording in their letters offering them the opportunity to become AEIs.

All this may change if Congress acts to extend ARRA, and we are watching those deliberations closely. One proposal being considered calls for an extension of the ARRA COBRA subsidy to 15 months, which would probably require another renotification to the various types of affected QBs, and some pretty tricky accounting.

Assume, for example, John Doe qualified for the subsidy as of March 1, 2009 and his nine months of subsidy expired on November 30, 2009. In December, 2009 he did not pay his COBRA premium because he couldn’t afford it since it was no longer subsidized, so his coverage is terminated as of December 1, 2009.Then in January Congress passes an extension of the subsidy to 15 months. John, and all the other Johns, will probably have to be renotified of their right to re-enroll in COBRA. But when would that re-enrollment commence? December 1st? January 1st? And what if John did pay his full December, 2009 premium, then Congress extends ARRA. Will the subsidy be retroactive back to December 1, resulting in a credit for John to be applied toward his share of future premiums?

Please know that we are watching the developments in Congress, and will respond quickly with new releases if there is an extension of ARRA passed. But if Congress does not act, your TravisCobra and WebCOBRA.com systems have already been programmed to handle the transition to a “post-ARRA” world.