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October 8, 2012

Medicare Disclosures Due Prior to October 15!

Filed under: Benefits,COBRA,Compliance,Insurance — Tags: 6:00 am

The Medicare Modernization Act requires certain disclosures be distributed annually regarding prescription drug coverage to Medicare eligible individuals.  This annual disclosure must be made prior to October 15.

If a group health plan offers prescription drug coverage, it must notify all Medicare eligible participants covered by the plan whether the prescription drug coverage offered is deemed, “creditable coverage,” meaning it is as good or better than what the standard Medicare prescription benefit (Part D) would cover.  Besides the active employee, notice would also have to be provided to the following individuals covered by the prescription drug coverage of the group plan:

  • Dependents of the actively working employee
  • Medicare eligible individuals covered under the COBRA provision and their dependents
  • Medicare eligible disabled employees
  • Medicare eligible retirees and their dependents

Besides the annual distribution of such disclosures, notice must also be given when the Medicare eligible individual joins the plan.

A second annual disclosure must be made to The Centers for Medicare & Medicaid Services (CMS) using the Online Disclosure to CMS Form to keep the government agency abreast of the status of the creditable coverage of their prescription drug plan.  This disclosure notice is to be made no later than 60 days from the beginning of the renewal date of the plan year, within 30 days of the termination of a prescription drug plan or within 30 days after a change in the creditable coverage status.


June 22, 2011

Weekly Wednesday Acronym – Cobra

Filed under: Benefits,COBRA — Tags: 11:07 am

I always have to stop and think what this acronym stands for because it is a mouthful – “Consolidated Omnibus Budget Reconciliation Act”.  By now, most of us are probably very familiar with the COBRA Act of 1985 because of recent layoffs and downsizing in your company.  Because of COBRA, employees are entitled to continue participating in the company’s group health plan for a prescribed period of time, usually 18 months.  What are the qualifying events that trigger COBRA continuation of coverage?

  • Termination of employment
  • Reduced work hours
  • Death
  • Divorce
  • Separation

The law applies to employees and their covered dependents and they can continue their health insurance by paying full cost of group coverage plus an administrative charge, typically 2%.  In certain circumstances, such as an employee’s divorce or death, the length of coverage period may be longer for qualified dependents.  COBRA is not extended to employees who are terminated for gross misconduct.

 There are certain notices required by COBRA.  Below are some of the notices along with timeframes: 

 •  COBRA rights notices. Employees and their spouses who become covered under group health plans must be given general notices describing their COBRA rights within the first 90 days of coverage.

• Employer notices of qualifying events. Employers must notify plan administrators within 30 days after qualifying events occur, such as covered employees’ termination or reduction in hours of employment, employees’ death, or covered employees’ entitlement to Medicare.

•  COBRA election rights notices. Qualified beneficiaries must receive COBRA election notices describing their right to continuation coverage and how to make elections. These notices must be provided within 14 days after plan administrators receive notice of qualifying events, or within 44 days in the case of self-administered plans.


May 12, 2010

COBRA Subsidy Extended Again, With Maybe More Extensions to Come

Filed under: COBRA — Tags: , 12:13 pm

On April 15th the eligibility period for the federal COBRA premium subsidies, under the American Recovery and Reinvestment Act (ARRA), was extended again.  This extension provides COBRA premium subsidies for eligible individuals, who are involuntarily terminated from employment, through May 31, 2010.

The previous extension covered involuntary terminations through March 31, 2010.   The latest extension provides retroactive eligibility for those terminated after that date. Employers who sent basic COBRA notices (without subsidy information) to qualified beneficiaries who became eligible for COBRA after March 31, 2010.


August 21, 2009

HR Fact Friday: COBRA Enrollment Doubles After Launch of Subsidy Program

Filed under: COBRA — Tags: , , , , , 6:54 am

Enrollments in COBRA (health continuation coverage) rose from less than 20% to nearly 40%  since the U.S. government enacted a new subsidy program, according to a report by Hewitt Associates, a consulting firm.

Signed into law in February 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated. To qualify for the subsidy, individuals must have 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.

Hewitt looked at COBRA enrollment activity for 200 large employers both before and after the enactment of the program. From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38%, up from 19% for the period of September 2008 through February 2009.

Hewitt estimates that without the subsidy, the average worker would spend $8,800 a year in COBRA healthcare costs. With the subsidy, the average worker would spend about $3,000 a year.

Source: 8/19/2009


March 19, 2009

DOL Publishes Model Notices for COBRA Subsidy

Filed under: COBRA — Tags: , , 2:43 pm

The Department of Labor has just published Model Notices that can be used to help comply with the new COBRA subsidy requirements.  They can be found at:    You’ll notice that there are several notices available to be used depending upon the circumstances.  Good luck navigating through them and figuring out what to do.

You’ll remember that the American Recovery and Reinvestment Act, signed on February 17th, has increased  employers’ COBRA obligations  significantly.  Additionally, very small employers not subject to the federal law, but who have comparable state “mini-COBRAs,” are also in for some big changes.  The Act of 2009 requires immediate attention by most employers.



February 19, 2009

COBRA Subsidy: Requires Immediate Action!!

Filed under: COBRA — Tags: , , , , 6:00 am

The American Recovery and Reinvestment Act of 2009, signed on February 17th, (the massive federal“stimulus” legislation) includes an important provision that affects most employers and requires immediate attention.  The new law will provide for a 65% monthly COBRA premium subsidy for most employees who were involuntarily terminated between September 1, 2008 and December 31, 2009. While the intent of the law is to assist employees who were terminated in reductions in force, it appears that nearly all involuntarily terminated employees and their dependents (qualified “assistance eligible individuals”) may qualify for the subsidy.  The subsidy may extend up to 9 months and applies to medical, vision and dental benefits.  It applies to nearly all employers with group health plans, regardless of whether they are subject to COBRA’s continuation rules. That includes private and government employers subject to COBRA and some smaller employers that may be subject to state “mini-COBRA” laws.  “Assistance eligible individuals”  are qualified for subsidy payments effective at the first period of coverage, beginning on or after the bill was signed into law (February 17th).   Practically, for most employers, that date is March 1st . 



February 13, 2009

HR Fact Friday: House and Senate Agree on 60% COBRA Premium Subsidy

Filed under: COBRA8:12 am

Reposted from


For anyone who has been laid off over the course of their career and considered continuing their employer provided healthcare coverage by utilizing COBRA, but quickly put the thought out of their heads because the cost was prohibitive, please read on . . .


House and Senate negotiators reached a final agreement Wednesday, February 11, on the massive stimulus bill, which is expected to receive final approval from the House and Senate by Friday.


The conferees’ agreement is similar to COBRA provisions approved by the Senate this week.  Under that measure, the subsidy would have been 50% of the premium and it would have been available for up to 12 months.


The earlier House version called for a 65% premium subsidy up to 12 months. It also would have allowed employees with 10 years of service and those 55 and older to retain COBRA until eligible for Medicare, a potentially decades-long entitlement that business groups successfully fought to have removed.


According to a draft summary of the final compromise bill, the COBRA premium subsidy would not be available to individuals with an annual income exceeding $125,000 or to couples with annual incomes exceeding $250,000.


Like the earlier bills, the compromise measure would require employers to locate employees laid off since September 1, 2008, who declined COBRA to tell them they have a new right to opt for the coverage with the government picking up 60 percent of the premium.


Individuals would have 60 days after receiving the notification to sign up for the coverage. The subsidy would be prospective, applying to future premium payments.


Source: Jerry Geisel of Business Insurance, a sister publication of Workforce Management.