Workers involuntarily terminated between September 1, 2008 and February 17, 2009 must be provided “second chance” COBRA coverage notice by April 18, 2009. Those workers will have another chance to elect COBRA if they did not elect COBRA when it was initially offered, or they elected coverage but then allowed that coverage to lapse. Upon receiving notice, the individual will have 60 days to make their election, and another 45 days to make their first payment. Even though the displaced employees receive a second opportunity to choose COBRA coverage, the COBRA continuation coverage is still generally limited to 18 months from the date of the involuntary termination.

A person who elects continued COBRA coverage under this period will have that coverage retroactive to the first coverage period beginning on or after February 17, 2009.

The Department of Labor created model notices, which you can find at www.dol.gov/ebsa/COBRAmodelnotice.html. One notice is available for eligible individuals who already had COBRA coverage in effect on February 17, 2009, informing them of the subsidy. A second notice is more general, and should be provided to qualified beneficiaries, not just covered employees, who experience a qualifying event between September 1, 2008 through December 31, 2009; and who either have not yet been provided the election notice, or who were provided the election notice that did not include the additional information on the COBRA subsidy. Both notices should explain how to apply for the subsidy.

The IRS has also published Notice 2009-27, which clarifies several terms and conditions of the COBRA subsidy. HR Answers, Inc. will be distributing another Alert addressing the highlights of that twenty-seven page notice on Monday. If you have immediate questions, please call us at 503-885-9815.