COBRA subsidy info available soon

April 16, 2009

The American Recovery and Reinvestment Act of 2009 (ARRA), which was signed into law by President Obama on Feb. 17, 2009, may temporarily reduce the premium you have to pay to purchase Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage under the medical, dental and/or vision plans for yourself and your qualified dependents, if you meet certain criteria.

All potentially affected employees will be receiving a notice from UnitedHealthcare that will be sent by April 18, 2009, if they experienced a COBRA qualifying event at some time from Sept. 1, 2008, through Feb. 16, 2009.

Only employees who are losing coverage due to involuntary termination, which means that the employee stopped rendering compensated service due to a dismissal, a suspension or a furlough from employment, are eligible for the COBRA premium reduction. Involuntary termination status is determined by your former employer.

This group of employees may be eligible for the temporary premium reduction for up to six (6) months, and in some cases nine (9) months, beginning in March of 2009.

To help determine whether you qualify for the ARRA premium reduction, you should read the notice from UnitedHealthcare carefully.

Members who either declined an earlier opportunity to enroll for COBRA, or elected COBRA but chose to discontinue the coverage, may be eligible for a second opportunity for enrollment and be eligible for the reduced COBRA premium.

The criteria for eligibility will be set forth fully in the notice from UnitedHealthcare, and you are urged to read this notice very carefully, as there are certain timeframes in which you must elect this coverage.

If you are eligible for COBRA coverage for any reason other than the involuntary termination of the employee, including, but not limited to, resignation, retirement, disability, pregnancy leave or other voluntary leave of absence, then you will NOT be eligible for the reduced premium rate.

If you qualify for the reduced COBRA premium rate, you will be responsible for only 35 percent of the current COBRA monthly premium. The federal government will pay the remaining 65 percent of the cost.

This reduced cost would only be available to you beginning in March 2009. It is not available earlier, even if you were enrolled for COBRA coverage prior to March 2009.

If you were enrolled for COBRA continuation coverage in January and February of 2009, your payments for those months would remain at the standard COBRA premium rate and your rate for March and any subsequent months in which you were eligible for the premium reduction, would be at the reduced 35 percent premium rate.

Once you are no longer eligible for the reduced premium rate, you may continue your COBRA coverage at the standard premium rate, for up to the remainder of your COBRA eligibility period (18, 29 or 36 months).

You should note that although you may now be eligible for this second opportunity to enroll for COBRA continuation coverage, and elect COBRA coverage beginning on March 1, 2009, when the reduced premium rate took affect, your COBRA continuation coverage eligibility date does not change to March 1, 2009.

For purposes of determining how long you may continue your COBRA coverage (18, 29 or 36 months), your original COBRA eligibility date will govern.

The information to be received from UnitedHealthcare will fully set forth all the details about the manner in which to enroll for COBRA at this time and how to obtain the ARRA subsidy.

Also, while the initial notice only pertains to those members who were involuntarily terminated and eligible for COBRA between Sept. 1, 2008, and Feb. 16, 2009, those employees involuntarily terminated after Feb. 16, 2009, will also receive a notice setting forth similar details.

Any questions members have regarding the ARRA COBRA subsidy provisions should be referred to UnitedHealthcare at (800) 842-5252, or contact them at the following address: UnitedHealthcare, Railroad Accounts, P.O. Box 150453, Hartford, CT 06115-0453.