the cobra subsidy and the arra new information and trion s next steps for implementation n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
THE COBRA SUBSIDY AND THE ARRA: NEW INFORMATION AND TRION’S NEXT STEPS FOR IMPLEMENTATION PowerPoint Presentation
Download Presentation
THE COBRA SUBSIDY AND THE ARRA: NEW INFORMATION AND TRION’S NEXT STEPS FOR IMPLEMENTATION

Loading in 2 Seconds...

play fullscreen
1 / 31

THE COBRA SUBSIDY AND THE ARRA: NEW INFORMATION AND TRION’S NEXT STEPS FOR IMPLEMENTATION - PowerPoint PPT Presentation


  • 279 Views
  • Uploaded on

THE COBRA SUBSIDY AND THE ARRA: NEW INFORMATION AND TRION’S NEXT STEPS FOR IMPLEMENTATION. WELCOME. Trion Webinar - March 19, 2009 Trion Speakers: Nancy Ciganik, Compliance Manager Frank Dallago, Director, COBRA Administration Jerry McGlone, Client Leader.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'THE COBRA SUBSIDY AND THE ARRA: NEW INFORMATION AND TRION’S NEXT STEPS FOR IMPLEMENTATION' - bess


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
welcome
WELCOME

Trion Webinar - March 19, 2009

Trion Speakers:

  • Nancy Ciganik, Compliance Manager
  • Frank Dallago, Director, COBRA Administration
  • Jerry McGlone, Client Leader
american recovery and reinvestment act of 2009
AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

TODAY’S AGENDA

  • American Recovery and Reinvestment Act of 2009
  • Amount and Duration of the Premium Assistance / COBRA Subsidy
  • Eligibility and Enrollment Provisions
  • Notification Requirements
  • Sample Notices
  • Method of Employer Reimbursement
  • Additional Administrative Provisions
  • Timeline / Next Steps
  • Trion Contact Information
  • Question and Answer Session
question and answer dialogue at end of webinar
QUESTION AND ANSWER DIALOGUE AT END OF WEBINAR
  • At the end of this presentation, at approximately 2:00 p.m. EDT, we will answer questions. To facilitate the Q & A process, please click on the chat panel on the bottom right section of your screen.
  • The Q & A session will be audio only and we will address as many questions as we have time to answer.
  • Within one week of this webinar, a document answering ALL questions will be posted to the Trion COBRA website.
the cobra subsidy
THE COBRA SUBSIDY

American Recovery and Reinvestment Act of 2009 (ARRA)

  • Effective date – February 17, 2009.
  • Government provided subsidy of 65% of the COBRA premium.
  • Applies to all plans subject to continuation coverage other then Health Flexible Spending Accounts (Examples – medical, dental, and vision plans).
  • Continuation coverage can be federal COBRA or state mini-COBRA laws.
  • The DOL issued model notices earlier today.
  • Expecting additional IRS regulatory guidance to be released.
the cobra subsidy1
THE COBRA SUBSIDY

AMOUNT AND DURATION OF THE SUBSIDY

  • Government provided subsidy of 65% of the COBRA premium.
    • Requires individual to pay 35% of the COBRA premium (employer pays 65%, and seeks reimbursement from federal government through payroll tax credit).
  • Subsidy applies to periods of COBRA coverage beginning on or after February 17, 2009 (i.e., begins with March COBRA premiums for most plans).
  • Lasts a maximum of nine months (subsidy ends sooner if the COBRA coverage period expires or individual is no longer eligible).
the cobra subsidy2
THE COBRA SUBSIDY

ELIGIBILITY AND ENROLLMENT PROVISIONS

  • Only Assistance Eligible Individuals (AEIs) are eligible for the subsidy – those individuals who:
    • are eligible for COBRA continuation coverage at any time between September 1, 2008, and December 31, 2009, because of “involuntary termination” of employment that occurred during that time period; and
    • elect COBRA continuation coverage.
  • No “reach-back” coverage begins with first period of coverage on or after February 17, 2009.

KEY DEFINITION

  • Involuntary termination - employees who are terminated by employer action (other than for gross misconduct). If an individual is terminated for gross misconduct, s/he is not eligible for COBRA coverage.
the cobra subsidy3
THE COBRA SUBSIDY

ELIGIBILITY AND ENROLLMENT PROVISIONS

  • Existing AEIs
    • Eligible AEIs who are currently enrolled in COBRA coverage.
    • Must be notified of availability of subsidy under the ARRA.
    • NOTE: The DOL sample notice released today provides an election form for existing AEIs.
the cobra subsidy4
THE COBRA SUBSIDY

ELIGIBILITY AND ENROLLMENT PROVISIONS

  • SECOND CHANCE COBRA ELECTION OPPORTUNITY
    • For individuals who would be AEIs, but
      • did not elect COBRA when offered the first time, or
      • no longer are enrolled in COBRA.
    • Individuals may elect COBRA coverage to begin upon enactment of ARRA, and end no later than the expiration of the maximum COBRA period (measured from the involuntary termination of employment date/loss of coverage).
    • Individuals must elect coverage within 60 days from the date of notice of the “second chance” to elect COBRA.
    • No pre-existing condition exclusion problems related to gap in coverage for AEIs who elect COBRA pursuant to ARRA.
the cobra subsidy5
THE COBRA SUBSIDY

TO DO

  • Identify all involuntarily terminated employees with a qualifying event date beginning September 1, 2008, up to a current date and notify your benefits administrator/broker - or whomever handles your COBRA administration.
  • Employers will need to establish a method for identifying involuntary terminations on a “go forward” basis through at least December 31, 2009.
  • Many employers have not had the necessity to track reason for termination and their internal systems may not currently accommodate the recording of that information.
the cobra subsidy6
THE COBRA SUBSIDY

TRION’S PLANS AND ACTIONS

NEW CLIENTS

  • March 23 – Trion will provide clients new to Trion’s COBRA Administration (clients with an effective date for Trion Administration of October 1, 2008, to March 1, 2009) with a standard spreadsheet file for use in working with their prior administrator or internal systems to obtain a complete list of COBRA qualified beneficiaries. This file will be delivered via email with instructions.

EXISTING CLIENTS

  • March 30 – Trion will provide a list to all active COBRA clients containing COBRA terminations with a qualifying event date of September 1, 2008, to March 29, 2009.
    • COBRA Link will be updated to include a termination reason code.
    • All clients submitting census files to Trion will be required to supply termination reason codes either as part of the file process or through a separate submission.
the cobra subsidy7
THE COBRA SUBSIDY

IMPORTANT LIMITATIONS ON ELIGIBILITY FOR SUBSIDY

  • Eligibility terminates if AEI is eligible for coverage under any other group health plan or Medicare.
  • AEIs must notify group health plan in writing if/when s/he becomes eligible for other group health plan or Medicare coverage, or else 110% penalty.
  • Eligibility is limited or eliminated for high income individuals (phased out for those with individual/joint annual income of at least $125,000/$250,000 and eliminated at $145,000/$290,000).
  • Possible written waiver for high-income individuals.

REVIEW OF PREMIUM ASSISTANCE DENIALS

  • The DOL will conduct expedited review of cases where individuals request treatment as AEIs and are denied.
  • Individuals will apply to DOL for review and DOL will make eligibility determinations within 15 business days.
the cobra subsidy8
THE COBRA SUBSIDY

PERMITTING CHANGE TO LOWER COST HEALTH CARE PLAN (OPTIONAL)

  • Ordinarily, COBRA continuation coverage is the level and type of coverage in effect on the day preceding the COBRA qualifying event.
  • Now, employers may (but need not) permit AEIs to change coverage to a lower (or same) cost health care plan option, so long as:
    • AEI makes election within 90 days of notice;
    • Option elected is also available to active employees (and is not dental, vision or EAP only, health FSA or employer on–site medical facility); and
    • Premium is less than or equal to coverage in effect upon qualifying event.
the cobra subsidy9
THE COBRA SUBSIDY

TO DO

  • Determine if the lower cost health care plan option will be offered.

TRION’S PLANS AND ACTIONS

  • Due to the administrative complexities of offering the alternative coverage election, Trion is not recommending plan sponsors provide this option to AEIs.
new cobra notice requirements
NEW COBRA NOTICE REQUIREMENTS

NEW GENERAL NOTICE REQUIREMENT

  • Notice of subsidy availability.
  • Notice must be provided:
    • Within 60 days of enactment of ARRA (or during regular COBRA notice timeframe);
    • To all qualified beneficiaries eligible to elect COBRA continuation coverage during the subsidy period – regardless of the type of qualifying event.
  • DOL sample notices:
    • “Full Version” of the DOL model notice includes information on the premium reduction as well as information required in a COBRA election notice.
    • “Abbreviated Version” of the DOL model notice may be sent in lieu of the full version to individuals who experienced a qualifying event during on or after September 1, 2008, and elected COBRA coverage and are currently enrolled.
    • These notices are for plans subject to the Federal COBRA provisions.
  • Link to the DOL sample notices is available at http://www.trion.com/cobra/
new cobra notice requirements1
NEW COBRA NOTICE REQUIREMENTS

NEW “SECOND CHANCE” NOTICE REQUIREMENT

  • Notice of second chance enrollment opportunity.
  • Notice must be provided:
    • Within 60 days of enactment of ARRA;
    • To potential AEIs only who had a qualifying event date from September 1, 2008, through February 16, 2009 (those who were entitled to elect COBRA before, but do not have coverage on February 17, 2009);
    • Notice must include specific requirements.
  • DOL sample notice:
    • “Notice in Connection with Extended Election Periods” – this DOL model notice includes information on ARRA’s additional election opportunity, as well as premium reduction information.
    • These notices are for plans subject to the Federal COBRA provisions.
  • This notice must be provided by April 18, 2009.
  • Link to the DOL sample notices is available at http://www.trion.com/cobra/
sample notices
SAMPLE NOTICES
  • SUMMARY OF THE COBRA PREMIUM REDUCTION PROVISIONS UNDER ARRA
sample notices1
SAMPLE NOTICES
  • REQUEST FOR TREATMENT AS AN ASSISTANCE ELIGIBLE INDIVIDUAL
sample notices2
SAMPLE NOTICES
  • PARTICIPANT NOTIFICATION OF INELIGIBILITY OF
sample notices3
SAMPLE NOTICES
  • FORM FOR SWITCHING BENEFIT OPTIONS
new cobra notice requirements2
NEW COBRA NOTICE REQUIREMENTS

TO DO

  • The DOL provided sample COBRA model notice that contains the information necessary to comply with the new notification requirements.
  • You may rely on the model DOL notice or create your own while incorporating the required language.
  • If your company provides payment coupons, all active qualified beneficiaries need to be issued new coupons once they are have been identified as premium subsidy eligible.
new cobra notice requirements3
NEW COBRA NOTICE REQUIREMENTS

TRION’S PLANS AND ACTIONS

  • While it was possible to create and issue qualifying event notices based on the initial legislation, Trion determined that it was best for our clients to wait for the DOL’s new model notice. This ensures that all necessary information is included in the notice in an approved format.
  • Trion is working on solutions to accomplish the billing requirements contained in the Premium Assistance for COBRA Benefits.
  • Trion will begin issuing new qualifying event notices for those COBRA eligible and designated as involuntary terminations as received. The mailing date of these notice will be March 31 through April 17.
  • New payment coupons will also be generated for those active COBRA Beneficiaries who have been designated as involuntary terminations.
how to calculate and get reimbursed
HOW TO CALCULATE AND GET REIMBURSED
  • Calculate the 35% subsidized premium based on the COBRA premium amount actually charged to COBRA participants (not the amount of the group healthcare plan premium).
  • After the COBRA participant pays the 35%, apply the 65% amount of COBRA premium paid by the employer as a credit against payroll taxes owed by the employer on IRS Tax Form 941.
  • Satisfy IRS reporting requirements for reimbursement:
    • attestation of involuntary termination;
    • amount of subsidy claimed;
    • estimated amount of subsidy for the next reporting period;
    • SSNs of employees receiving subsidy, amount of subsidy reimbursed, and whether coverage was for employee, employee +1/2, or family.
how to calculate and get reimbursed1
HOW TO CALCULATE AND GET REIMBURSED

TO DO

  • Employers must calculate the 65% subsidy based on the COBRA premium charged to, and paid by, the AEI.
  • In order for employers to be reimbursed for premium subsidies, monthly COBRA activity reporting must be enhanced to capture and report on the premium subsidy activity.
  • The employer will be required to provide the Internal Revenue Service with some level of detail with filings of their 941 forms.

TRION’S PLANS AND ACTION

  • Trion is preparing enhancements to the reporting capabilities of its COBRA platform.
  • We expect to have the reporting requirements clarified and programmed in advance of any premium subsidy payments.
transition rule
TRANSITION RULE

REFUNDING OVERPAYMENT OF PREMIUMS

  • If AEI pays full COBRA premium (rather than 35% subsidized amount) for the first or second premium coverage period following enactment of ARRA, employers must either:
    • Refund the AEI for the amount of overpayment (i.e., 65% of the premium paid) within 60 days, or
    • Issue a credit to the AEI in the amount of the overpayment to be applied to future COBRA premiums owed by the AEI (but this is permitted only so long as it is reasonable to believe the credit will be used within 180 days from payment of the full premium).
transition rule1
TRANSITION RULE

TO DO

  • Determine if a refund will be issued for the overpayment amount received during the transition period or to issue a credit toward future premiums.

TRION’S PLANS AND ACTION

  • Trion is implementing processes to calculate and provide a credit to any AEI who made an overpayment of their COBRA premiums.
  • For those AEIs that are unable to use the full credit prior to the termination of COBRA coverage will receive a refund.
timeline review
TIMELINE REVIEW

COBRA subsidy

  • September 1, 2008 through December 31, 2009 – subsidy eligibility period.
  • March 19 – DOL model notification due.

Existing AEIs

  • April 18 – Notification deadline to all existing AEIs with revised payment coupons (if utilized).

Second Chance Enrollment Opportunity AEIs

  • April 18 – Notification deadline to all AEIs eligible for the second chance enrollment option.
  • June 17 – AEIs who elect coverage under the second chance enrollment option have 60 days from notification to elect coverage.
  • July 31 – AEIs who elect COBRA under the second chance enrollment option have up to 45 days to submit initial payment.

AEIs eligible for subsidy on March 1

  • November 30 – 9 month subsidy period ends.
trion cobra administration communication timeline review
TRION COBRA ADMINISTRATION COMMUNICATION TIMELINE REVIEW

NEW CLIENTS

  • March 23 – Trion will provide clients new to Trion’s COBRA Administration (clients with an effective date for Trion Administration of October 1, 2008 to March 1, 2009) with a standard spreadsheet file for use in working with their prior administrator or internal systems to obtain a complete list of COBRA qualified beneficiaries. This file will be delivered via email with instructions.

EXISTING CLIENTS

  • March 30 – Trion will provide a list to all active COBRA clients containing COBRA terminations with a qualifying event date of September 1, 2008 to March 29, 2009.
    • COBRA Link will be updated to include a termination reason code.
    • All clients submitting census files to Trion will be required to supply termination reason codes either as part of the file process or through a separate submission.
trion cobra administration communication timeline review1
TRION COBRA ADMINISTRATION COMMUNICATION TIMELINE REVIEW

SUBMISSION DEADLINES

  • April 10 – deadline for submitting termination reason for COBRA terminations with a qualifying event date of September 1, 2008 to March 29, 2009
  • April 17 – Clients are required to have updated census files containing the termination reason code.

MAILING OF NEW NOTICES

  • March 31 to April 17 – Trion will begin issuing new qualifying event notices for those COBRA eligible and designated as involuntary terminations as received.
  • New payment coupons will also be generated for those active COBRA Beneficiaries who have been designated as involuntary terminations.
trion s client resources
TRION’S CLIENT RESOURCES

Trion has established numerous resources to further assist clients and address their questions and concerns:

COBRA hotline – 610.945.1173

  • We have established a toll free COBRA hotline for you to call and personally speak with a COBRA expert.

Directly routed email address - cobra.alerts@trion.com

  • We have established an email address that feeds directly to an internal Trion COBRA expert to answer your questions and meet your concerns.

Designated COBRA webpage - http://www.trion.com/cobra/

  • Trion’s has established a webpage specifically designated for COBRA which will house a library of relevant information around the new legislation. This information includes, but is not limited to, a FAQ section and a copy of the Federal legislation with guidance regarding how it will impact you as an employer.
question and answer dialogue at end of webinar1
QUESTION AND ANSWER DIALOGUE AT END OF WEBINAR
  • At this time, we will answer questions. To facilitate the Q & A process, please click on the chat panel on the bottom right section of your screen.
  • The Q & A session will be audio only and we will address as many questions as we have time to answer.
  • Within one week of this webinar, a document answering ALL questions will be posted to the Trion COBRA website.