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.

Last week, Travis reported that the IRS released informal guidance regarding the proper procedure to claim credit for an ARRA premium subsidy on IRS Form 941. Through an email authored by a senior IRS Analyst, the IRS clarified that the ability to claim credit for the COBRA premium subsidy is based on the date that the COBRA premium payment is received, not the time period to which such credit is applied.

The following document will discuss how to import the ARRA Model Notice into the Letter Writer for Letters 79 – 81.

On January 11, 2010, the U. S. Department of Labor (“DOL”) released an updated Fact Sheet and FAQs for Employees, which signals that the DOL is developing updated model notices to reflect the Department of Defense Appropriations Act, 2010 (“2010 DOD Act”).

Users of both TravisCobra and WebCOBRA.com are now able to use new releases of these systems reflecting the changes to the COBRA law enacted December 22nd as part of the Department of Defense Appropriation Act 2010.

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.

Now that the Department of Defense Appropriation Act, 2010 DODAA, 2010, or H.R. 3326)has passed the Senate, Congress has given a Christmas gift to several hundred thousand existing COBRA qualifying beneficiaries and to others who lose their coverage during the first two months of 2010. An extension of the 65% ARRA subsidy of COBRA premiums from nine to fifteen months, and possible eligibility for the subsidy to those who have COBRA qualifying events of termination through February 28, 2010.

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.

• Unless Congress acts, the last ARRA-eligible qualifying events are coming soon and WebCOBRA.com has been modified to ensure that you can successfully administer this transition. A new letter named ARRA Subsidy Termination Notice has been added to WebCOBRA.com and can be accessed in the Internet Word Processor for those customers that would like to customize the letter. This letter automatically generates when an AEI’s ARRA subsidy is within 30 days of the final month of benefit (the 9th month of his/her ARRA subsidy). The ARRA Subsidy Termination Notice will also inform the Qualified Beneficiary of their total COBRA premium without the ARRA subsidy.

With this most recent release of Travis Cobra our customers can expect the following added functionalities:

Thanks to a recommendation from Sheffield Olson McQueen, one of our TPA customers whose clients have received audit notices from the IRS about ARRA subsidy audits, a new ARRA Audit Report can be found in WebCOBRA’s Report module. The report will list all ARRA receipents and all applicable premiums, subsidies, and payment totals to make IRS auditing a little easier. The report is fashioned in accordance with the information requested by the IRS for ARRA premium subsidy audits.

You can begin using this report as soon as October 14, 2009 in WebCOBRA, a sample is shown below:

The HITECH Act was signed by President Obama on February 17, 2009, coincident with the ARRA law. Most of the HITECH provisions go into effect on February 17, 2010, and HITECH makes significant changes to the HIPAA laws and rules, many of which will significantly impact the relationships between group health plans (and other “covered entities”) and their Business Associates. HITECH adopts a number of changes to HIPAA to significantly broaden the definition of a breach of Protected Health Information (PHI), defines what needs to be done when breaches of PHI occur, and for the first time impose some mind-boggling penalties for breaches of PHI.

Ironic, isn’t it, that the ARRA changes to COBRA, which represent the most significant amendments to the COBRA law since its original enactment in 1986, are temporary. At least they may be temporary.

Travis Software’s system developers continue to work to further refine the ARRA modifications we first put in place for TravisCobra and WebCOBRA.com last February. Improvements such as changing the ARRA Premium Reduction report, making it easier for you to change a QB’s AEI status and further standardizing disbursement reporting are all scheduled to be released soon for both TravisCobra and WebCOBRA.com.

Today marks the 100th day since the American Recovery and Reinvestment Act of 2009 was signed, enacting what proved to be the largest change to COBRA regulations in recent history. Below, tell us your ARRA story and answer a quick poll about COBRA participation.

Two new ARRA reporting capabilities have been added to the TravisCobra system within the past week, and we wanted to make sure that you know about them!

Having two ARRA reports that deal with payments may seem like overkill; however, the two reports are necessary. In one instance you may want to look at all ARRA premiums in a month, but you also may want to see all payments that affect ARRA subsidies in that month. We can now let you slice the data both ways.