There has been a great deal of recent confusion about the COBRA subsidy in the American Recovery and Reinvestment Act (ARRA). The uncertainty has stemmed from a lack of “ownership” on the local level as to who was going to notify all the small group assistance-eligible individuals (AEIs) of their new COBRA rights.
AEIs are employees involuntary terminated between Sept. 1, 2008 and Dec. 31, 2009 who also meet other qualifying criteria.
Pending legislation addresses this issue head-on, but some important details remain open-ended. This bill (AB 23) dictates that it’s the insurers who should notify all qualified beneficiaries eligible for premium assistance under Cal-COBRA (sending out these “second-chance” letters).
The insurance carriers will comply. But instead of sending specific, detailed letters only to assistance-eligible individuals, most insurers plan to send notifications to all terminated employees in the relevant timeframe (Sept. 1, 2008-March 31, 2009). Those former employees will have to read the form letter and determine for themselves if they’re eligible for the subsidy, as defined by the ARRA. That means small group employers may well be getting some phone calls from confused former employees who don’t know where they stand.
Additionally, some carriers are requesting small group employers to identify their own AEIs and send that information along to the carrier. If AB 23 passes in its current form, we know it’s the insurer who will be ultimately sending out these notification letters. But it’s clear that any small group with 2-20 employees should be proactively identifying all their AEIs. Your carrier may ask you for information … and so could AEIs themselves.
At Stephenson Welsh Insurance Services, we’re helping our small groups identify their AEIs. Your broker should be doing that, too. We’re also finding that some employers are receiving requests for information from carriers but aren’t sure exactly what to do or what specific information to send back. Your broker should be touching base with you so you’re aware of what’s happening and, if necessary, educate you so you’re comfortable complying with any requests made.
One final note on this topic: If you are an individual reading this who was involuntarily terminated from your job between Sept. 1, 2008 and now, we encourage you to contact your former employer directly if you’re unclear about your “second-chance” COBRA eligibility or COBRA rights. Regardless of this momentary confusion, many will benefit from this new ARRA subsidy and should be taking advantage of it.