Travis Software Official Blog

On March 2, 1010, the American Recovery and Reinvestment Act of 2009 (“ARRA”) was amended by the Temporary Extension Act of 2010 (H.R. 4691) (the “Act”) which, among other things, extends eligibility for the COBRA premium subsidy through March 31, 2010. The Act also includes a measure that extends premium assistance to eligible individuals that had or have a reduction of hours between September 1, 2008 and March 31, 2010 but did not elect COBRA coverage due to that qualifying event, and that later incur an involuntary termination of employment on or after March 2, 2010. Plan Administrators have new election period and notice responsibilities for such individuals.

To Address This New Law, Travis Is Enhancing its Systems in the Following Ways:

On Monday, March 8, 2010,Travis will release on WebCOBRA.com and make a download and installation available for TravisCobra that:

1. Modifies the standard COBRA Election Notice to include the individuals that are now eligible for premium assistance pursuant to the Act.

2. Provides an option to re-notify any QB’s with qualifying event dates on or after March 1, 2010 that are entered into the system after installation of the new release, assuming that the User has marked their qualifying event type as “ARRA eligible”. (The previous ARRA eligibility expired on February 28, 2010)

3. Provides the ability to re-notify individuals whose qualifying event date was between March 1, 2010and March 31, 2010, and whose COBRA Election Notices were accepted prior to the date that the new release is initiated, letting the appropriate QBs know that they may be eligible eligibility for premium assistance.

On or before March 15, 2010, Travis will send a supplemental release on WebCOBRA and a download and installation available for TravisCobra that:

1. Includes a new report entitled the “QB Lookback for Reduction in Hours” that lists each QB that had a qualifying event of a Reduction of Hours between September 1, 2008 through March 31, 2010.This report will be broken up by employer for multi-employer systems.

2. Includes a new Qualifying Event Code for “Reduction of Hours Followed by an Involuntary Termination of Employment” that can be used for those who incurred a qualifying event of a reduction in hours between September 1, 2008 and March 31, 2010, and were offered COBRA but who either did not make (or made and discontinued) an election of COBRA continuation coverage, and who later incur an involuntary termination of employment between March 2, 2010 and March 31, 2008. These people are treated as having an additional qualifying event (the involuntary termination of employment) that requires an additional COBRA election Notice and election period. However, the period of COBRA continuation coverage is determined as though the qualifying event was the reduction of hours.

What You As A Plan Administrator May Do to Help Satisfy the Act’s Requirements:

Plan Administrators may have an interesting time gathering the information necessary to implement this new qualifying event. Before this Act, employers have not needed to look back to see if an individual first incurred a specific Qualifying Event to determine whether they are entitled to receipt of an additional notice and a new COBRA election period. We believe one of the most difficult parts of administering this Act may in fact be communicating to client/employers that they must examine all terminations on and after September 1, 2008 in light of this new qualifying event. More simply, employers must ask themselves, “Was this termination preceded by a Reduction in Hours that occurred on or after September 1, 2008?”

The “QB Lookback for Reduction in Hours” Report added to TravisCobra and WebCOBRA.com on or before March 15, 2010 will be helpful in identifying those who may qualify for a new election period and notification. . However, if a Plan Administrator has client/employers for whom they began performing COBRA administration after September 1, 2008, it may well be up to the client/employer to recognize whether there is a need to notify the QB of his/her COBRA election rights..This latest extension merely provides immediate relief, since the premium assistance under the Department of Defense Appropriations Act, 2010 expired February 28, 2010. Please note that Congress is considering a further extension and expansion of the ARRA COBRA subsidy, possibly extending eligibility for the 15-month subsidy to those incurring an involuntary termination of employment through December 31, 2010.

Travis will work hard to promptly implement changes to our systems upon any act of Congress as necessary,to help you meet the ever-changing requirements of COBRA administration.

For additional information regarding the Temporary Extension Act, please see http://www.dol.gov/ebsa/COBRA.