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COBRA ARRA PRESENTATION

COBRA ARRA PRESENTATION. 2009. COBRA ARRA. WHAT IS ARRA?. ARRA stands for the American Recovery and Reinvestment Act. Provides a 65 percent reduction in the premiums payable for involuntarily terminated employees and their families under COBRA

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COBRA ARRA PRESENTATION

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  1. COBRA ARRA PRESENTATION 2009

  2. COBRA ARRA WHAT IS ARRA? • ARRA stands for the American Recovery and Reinvestment Act. • Provides a 65 percent reduction in the premiums payable for involuntarily terminated employees and their families under COBRA • Applies to Health, HRAs, Dental-only, and Vision-only plans • General Purpose/ Limited Purpose HCSA is not included

  3. COBRA ARRA WHAT IS ARRA? • Premium reduction will extend for up to 9 months within their eligibility period • Applies to any involuntarily terminated employees during the period from September 1, 2008 through December 31, 2009

  4. COBRA ARRA INVOLUNTARY TERMINATION • An involuntary termination is a termination that is at the direction of the employer • Termination for gross misconduct will generally disqualify an employee and family from COBRA coverage • For questions re: involuntary termination, contact the Department of Labor’s Employee Benefit Security Administration’s Benefits Advisors at 1-866-444-3272

  5. COBRA ARRA ELIGIBILITY REQUIREMENTS • To be eligible for the ARRA premium reduction, an employee must be COBRA-qualified and meets the following requirements: • Eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 • Elects COBRA coverage when first offered or during the additional election period • Involuntarily terminated during the period beginning September 1, 2008 and ending December 31, 2009

  6. COBRA ARRA NON-ELIGIBILITY • An employee will not be eligible for ARRA premium reduction if: • Eligible for other group health coverage (e.g. through a spouse’s plan) including Dental & Vision • Eligible for Medicare

  7. COBRA ARRA NON-ELIGIBILITY • A reduction of work hours will not make an individual eligible • Death of the employee will not be considered involuntary termination • Employees who were laid off before September 1, 2008, are not eligible

  8. COBRA ARRA HOW ARRA WORKS • Works the same way as standard COBRA coverage • 65% of premium is paid by SPA • 35% of premium is paid by the individual • The total premium amount is inclusive of the 2% admin fee

  9. COBRA ARRA HOW ARRA WORKS • The subsidy is available the first coverage period beginning on or after February 17, 2009 (enactment date of the law) • The subsidy for COBRA eligible individuals of the State of Georgia will begin March 1, 2009

  10. COBRA ARRA HOW ARRA WORKS? • Highly Compensated Individuals earning more than $145,000 ($290,000 on joint returns) will have their income tax increased by the total amount of subsidy they receive • Highly Compensated Individuals earning more than $125,000 but less than $145,000 (or more than $250,000 but less than $290,000 for joint returns) will have their income tax increased by a percentage of their total subsidy received in that year

  11. COBRA ARRA HOW ARRA WORKS? • Highly Compensated Individuals may elect to permanently waive out of the subsidy • The individual will need to complete the “Highly Compensated Waiver of COBRA Subsidy Form” • If waived, the subsidy cannot be claimed in a subsequent year when income is below the threshold • Contact the IRS: 1-800-829-4933 or www.irs.gov

  12. COBRA ARRA COBRA PARTICIPATION • Anyone who was involuntarily terminated after September 1, 2008, and: • Currently enrolled in COBRA • Did not initially elect COBRA within 60 days • Elected COBRA, but has since dropped coverage

  13. COBRA ARRA COBRA PARTICIPATION • Individuals who are not currently enrolled or discontinued COBRA will not be required to fill in the gap of coverage for those months • Certification of continued coverage will not show a break in coverage with the vendor

  14. COBRA ARRA CHANGES IN COVERAGE • Special enrollment (i.e. changes made to coverage) is not permitted with the Dental and Vision plans

  15. COBRA ARRA ADMINISTRATION RESPONSIBILITY • Notification letter will be submitted by SPA to all COBRA eligible individuals who terminated employment after September 1, 2008 • Chart will be included on the reverse side indicating the subsidy premium amount

  16. COBRA ARRA ADMINISTRATION RESPONSIBILITY • Notice will include a “voluntary” or “involuntary” termination status for each individual • Please make certain future terminations are entered correctly on FBTA • Individuals wishing to challenge subsidy eligibility will do so through Health and Human Services • Right to appeal process will be included on the notice from SPA

  17. COBRA ARRA ADMINISTRATION RESPONSIBILITY • The notice from SPA will include both the subsidized premium amount and the full premium amount • A letter will be issued to eligible individuals when their subsidy period has concluded and remind them to pay the full premium amount

  18. COBRA ARRA ADMINISTRATION RESPONSIBILITY • Notification to COBRA eligible individuals about the second election period will occur no later than April 18, 2009 • SPA will provide any necessary forms and information needed to enroll • Eligible individuals will have 60 days from the date of the notice to enroll

  19. COBRA ARRA SUBSIDY PERIOD • Eligible individuals can receive the COBRA subsidy for up to 9 months within their eligibility period • COBRA coverage will still be available for up to 18 months (29 months or 36 months in certain cases) • After the premium reduction period ends, the individual will be responsible for the full premium amount

  20. COBRA ARRA SUBSIDY PERIOD RESTRICTIONS • The subsidy period will end less than 9 months if one of the following events occur: • Plan administrator no longer offers any group coverage to employees • The individual fails to pay premiums • The individual becomes eligible to receive health coverage through Medicare or another group health plan • The individual’s COBRA eligibility period ends

  21. COBRA ARRA SUBSIDY PERIOD RESTRICTIONS • “Attestation”, or verification of non-eligibility for other group health coverage, will be part of the subsidy restrictions

  22. COBRA ARRA SUBSIDY PERIOD RESTRICTIONS • If an individual becomes eligible for Medicare or another group health plan, he/she must notify the plan administrator immediately • Continuing to receive the subsidy after becoming eligible for other coverage could result in penalty equal to 110 percent of the premium after eligibility ends

  23. COBRA ARRA ARRA APPEALS PROCESS • Individuals who feel they qualify, but are denied, can apply for review through the Department of Health and Human Services • For more information or assistance to file the appeal, individuals can contact HHS via email at phig@cms.hhs.gov • The HHS Secretary will review the appeal and make a determination within 15 business days

  24. COBRA ARRA ARRA CONTACT INFORMATION • Additional questions re: COBRA premium reduction • Contact the Department of Labor’s Employee Benefits Security Administration’s Benefits Advisors at 1-866-444-3272 • Dedicated COBRA web page: www.dol.gov/COBRA • Get up to date fact sheets, FAQS, model notices, posters

  25. COBRA COBRA CONTACT INFORMATION • For Health COBRA information, contact DCH • Local: 404-651-6142 • Toll Free: 1-800-483-6983 • For Dental, Vision, and/or the General/Limited Purpose HCSA COBRA information contact SPA • Local: 404-656-2730 • Toll Free: 1-888-968-0490

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