Significant changes are coming to COBRA administration. Currently, the House H.R. 598 and Senate S. 29 are considering proposals that would subsidize coverage and expand the amount of coverage available for older and long-tenured employees. These changes will likely require more complex COBRA administration and updates to initial rights notices, qualifying event notices, and premium collection processes.

Once the COBRA legislation is finalized, Cobra Control Services, LLC will offer free webinars on the COBRA changes and offer detailed guidance for employers.

Highlights of the legislation affecting COBRA include:

 ·         Premium assistance (65 percent of the COBRA premium) for up to 12 months for those who elected COBRA from September 1, 2008, through December 31, 2009. This would apply only to involuntary employment terminations (for reasons other than gross misconduct). The employer would pay this subsidy to the carrier (for fully insured plans) or absorb the subsidy (for self-funded plans) and receive credit for it through reduced payroll taxes.

·         A new 60-day election period would exist for those who did not elect coverage during that time.

·         New notice requirements would take effect.

·         Expanded COBRA coverage would be in place for employment termination or reduction of hours of employment qualifying events for employees who are at least age 55 or had 10 or more years of service. This coverage could continue beyond 18 months until any other termination reason occurs (e.g., Medicare entitlement, failure to pay).

These provisions could significantly increase the percentage of beneficiaries opting for coverage

Cobra Control Services, LLC has begun preparing for these changes on behalf of its COBRA administration clients. We expect the bill could reach President Obama’s desk within the next 15 days.

We will keep you apprised as this legislation’s progresses. For more information, you may contact us at info@cobracontrol.com or 888-887-6187.