Travis Software Official Blog

The Employee Benefits Security Administration (EBSA) recently updated the DOL website to address the expiration of the COBRA continuation coverage assistance under the American Recovery and Reinvestment Act (ARRA). The update modified the introductory paragraph to address the ARRA subsidy expiration on August 31, 2011 and added a new Question/Answer to the “Frequently Asked Questions” page to discuss situations where the 15-month ARRA subsidy may extend beyond the general expiration date of August 31, 2011.

As the end of the availability of ARRA premium subsidy approaches, certain assistance eligible individuals have already or will soon be coming off of their 15-month period of federal government subsidy. Though not required under COBRA, both WebCOBRA and TravisCobra systems include an “ARRA Subsidy Termination Notice” that automatically generates thirty (30) days prior to the last day that a participant is eligible for the subsidy. In this post, you will find helpful information on administering COBRA to qualified beneficiaries who are transitioning from a subsidized coverage period to a normal COBRA coverage period.

Effective June 1, 2010, the ARRA language, ARRA posters, and “Request for Treatment as an Assistance Eligible Individual (AEI)” will not be included automatically in the default letters prepared by TravisCobra^TM and WebCOBRA for individuals with a qualifying event on or after June 1, 2010.

For the past several months, Travis’ developers have been working on significant improvements to WebCOBRA On Demand that are now either in the final stages of development or in our Quality Assurance/Testing process. The efforts have been delayed by the repeated changes to COBRA and ARRA over the past months which have required “all hands on deck” efforts by our staff to produce releases for you very quickly.

Even with all the ARRA releases, we have made progress on programming these major new improvements. They are now scheduled to be added to WebCOBRA over the next few months, and are close enough to delivery that we wanted to tell you about them.

On April 15, 2010, Congress passed and the President later signed the Continuing Extension Act of 2010 (the “Act”) that extended to May 31, 2010 the eligibility for the 65% premium subsidy for COBRA premiums for individuals that incur an involuntary termination of employment on or before that date. Prior to this Act, the eligibility time period for the COBRA premium subsidy expired on March 31, 2010. This Act modifies the American Recovery and Reinvestment Act of 2009 (ARRA), which was amended by the Temporary Extension Act of 2010 earlier this year.

Travis Software Corp. is working now on updates to both WebCOBRA On Demand and TravisCobra^TM to help you meet the requirements of this new law.

[Updated 4/26/2010] We plan to have the new release of TravisCobra^TM delivered to TravisCobra^TM Users on Tuesday, April 27, 2010. The new release of WebCOBRA On Demand will be implemented and available to WebCOBRA On Demand Users by Thursday, April 29, 2010 at 8:00 a.m. Additional testing was required for these updates to include the new ability to access and edit the ARRA Summary Letter and Request Form (as published by the DOL).

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: