The DOL has published some rather sparse guidance on the COBRA provisions included in the American Recovery And Reinvestment Act Of 2009.     Additional guidance is forthcoming on the COBRA premium reductions.

The news release recapitulates the provisions of the AARA on this point as follows:

Individuals who are denied treatment as “assistance eligible individuals” may appeal to the DOL.  The DOL states that it is “developing a process and an official application form that will be required to be completed for appeals”.

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% reduction in COBRA premiums for certain assistance eligible individuals for up to 9 months. An assistance eligible individual is a COBRA “qualified beneficiary” who meets all of the following requirements:

  • Is eligible for COBRA continuation coverage at any time during the period beginning September 1, 2008 and ending December 31, 2009;
  • Elects COBRA coverage (when first offered or during the additional election period), and
  • Has a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. Other limitations may also apply. There is no premium reduction for periods of coverage that began prior to February 17, 2009