May 26, 2009

DOL Releases Expedited Review Application for COBRA Subsidy

The Department of Labor (DOL) has posted on its web site the application and instructions that should be used by individuals to request that the DOL review a COBRA subsidy denial. As explained in the previous SGR Client Alerts regarding the COBRA subsidy under ARRA, certain individuals who are involuntarily terminated between September 1, 2008 and December 31, 2009 are eligible to pay a reduced premium equal to 35% of the COBRA premium, while the employer pays the remaining 65% and is reimbursed by a payroll tax credit.

The expedited review process is available for individuals who requested but were denied the COBRA subsidy, and who wish to have the denial reviewed by the DOL. The DOL must make a determination within 15 business days of receipt of a completed request for review.

The updated information on the DOL web site includes general information about the expedited review process, the application to request review, and instructions on how to complete the application. The instructions explain that applicants should include with their applications copies of any documents that they think would help the DOL in its review, such as:
– The applicant’s COBRA election notice;
– The applicant’s Request for Treatment as an Assistance Eligible Individual or other form used to request the premium reduction;
– The applicant’s insurance card;
– Payroll stubs showing deductions for health benefits;
– Any documents detailing the date and circumstances of the termination of the applicant’s employment; or
– Any documentation an applicant was provided regarding the denial of the premium reduction.

The application also requires a variety of detailed information to be provided by applicants regarding items such as:

  • The applicant’s job termination;
  • Whether the applicant received the applicable COBRA notices, including the notice informing the applicant about his or her right to a premium reduction;
  • The applicant’s eligibility for other group health plan coverage;
  • Plan sponsor and employer information; and
  • Insurance, HMO, or third-party administrator information.

The DOL is encouraging applicants to complete their applications online, but a paper copy of the application can be completed and mailed or faxed to the DOL. Individuals covered by group health plans of federal, state, and local government employers or group health plans subject to a COBRA-comparable state law must direct their requests for review to the Department of Health and Human Services (HHS).

For more information on the DOL’s expedited review process, or for copies of the application or other updated materials, click here or contact your SGR Executive Compensation and Employee Benefits counsel.

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