COBRA Subsidy Notices

[Chaz]

Do the various notices going out to COBRA subsidy-eligible individuals have to specify the amount that the individuals have to pay for their coverage (i.e., do they have to give the 35% amount) or can they state the 102% and require the individuals to make the calculation themselves?

[GMK]

Don't know if it's required, but ...

if you list the dollar amounts now, it may avoid some administrative disputes over pennies later.

[oriecat]

I modified my COBRA rate chart to include both the full premium and the subsidized rate, with a note at the bottom saying that the subsidized rates apply only to qualified Assistance Eligible Individuals, for no more than 9 months. I certainly think it is a good idea to let them know, otherwise you risk either lots of miscalculated premium payments or lots of phone calls, both of which I prefer to avoid.

[Chaz]

Well, the reason I ask is that a large, well-known COBRA administrator is apparently NOT including the 35% amount for its clients (at least the last I heard).

I agree that it makes sense to include the 35% amount from an administrative POV, but I was wondering if there is any legal requirement to do so as well.

[oriecat]

Hmm. Well the COBRA notice regs say "(xi) A description of the amount, if any, that each qualified beneficiary will be required to pay for continuation coverage;" (29 CFR 2590.606-4(b)(4)(xi)) I would think this would still apply under the new notices, which would be why the DOL included both amounts in their models.

[Chaz]

My thoughts EXACTLY.

[Guest Mona-Benefits1]

Does the Assistance Eligible Individual pay 35% of the 102% or 35% of the 100% full cost PLUS the 2% admin fee? Seems that the employer pays for 65% of the 100% only. Can we "assume" that the individual electing the coverage pays the full admin fee?

[oriecat]

Nothing in any of the documents I have seen separates out "premium" vs "admin fee". It is all just "COBRA premium", which in my mind, at least, means the employer premium plus the 2%. And employees pay 35% of the COBRA premium.

[Chaz]

There is guidance that the AEI pays 35% of the 102% total COBRA cost.

[Chaz]

As a follow on to this, at least TWO large COBRA administrators are not providing the 35% amount in the extended election COBRA notices. One of them (at least) is not including the 35% amount in the general notices going forward (and are just sending the old version of the COBRA notice along with a subsidy "insert").

Is anyone else experiencing this with their or their clients' COBRA notices? If so, what, if anything, are you doing about it?

Thanks.

[Chaz]

Has anyone faced this situation?