As previously examined in our article “Recent Changes to COBRA Require Immediate Attention” (click here for article), President Obama signed the American Recovery and Reinvestment Act of 2009 into law on February 17, 2009. The Act provides involuntarily terminated eligible individuals with a premium reduction subsidy and requires employers to provide additional COBRA notices. These changes are effective immediately.

On March 19, 2009, the Department of Labor issued model notices to help employers administer and comply with the new COBRA provisions. These model notices may be used by employers to provide basic COBRA notification as well as the required subsidy notification. Employers may elect to draft their own notices, but any notice issued must contain certain elements as required by the Act. Failure to issue the appropriate notices may subject the responsible party to fines of up to $110 per day.

If you have any questions regarding how to satisfy these new COBRA notice requirements, or how the Act affects your COBRA responsibilities, please contact Ryan Fox (317-968-5560), Kate Erdel (317-968-5324), or any member of the Bingham McHale Labor and Employment Department.