DOL and HHS Announce Details of COBRA Subsidy Denial Appeals Process
June 12, 2009
The American Recovery and Reinvestment Act of 2009 (“ARRA”) made significant changes to COBRA and similar state continuation provisions, including a COBRA subsidy for “assistance eligible individuals” or “AEIs” (which includes any qualifying dependents). In order to be an AEI, an individual must be eligible for COBRA coverage due to the covered employee’s involuntary termination of employment from September 1, 2008 through December 31, 2009. Under ARRA, if an individual believes he or she qualifies as an AEI but is denied premium assistance, the individual may appeal the decision to the Department of Labor (“DOL”). The DOL’s review must take place within 15 days of the DOL’s receipt of the individual’s application.
Recently, the DOL posted long-awaited information regarding its subsidy appeal process online here. The website also provides the application form for appeals and instructions for completing and submitting the application. In completing the application, the individual must (1) answer questions regarding whether the individual is eligible to be an AEI; (2) provide personal contact information and information about the plan sponsor, the employer, the insurance company (or HMO), benefits administrator or other entity responsible for providing COBRA coverage; (3) describe the reason(s) that the individual was denied COBRA coverage and/or the premium subsidy and (4) include supporting documentation helpful to the application. The DOL indicates that this documentation may include the COBRA election notice and subsidy form, insurance information card, paystubs showing deductions for health benefits, and documents detailing the date and circumstances of the employee’s termination of employment.
The DOL also requires that an individual file a separate application for any family member with different plan information than the information provided by the individual.
Plan administrators and employers may receive requests for additional information from the DOL as part of this expedited review process. In order to comply with such requests, plan administrators and employers should coordinate with their service providers and internal departments, such as human resources and payroll, to ensure an accurate and prompt response to any requests.
If continuation coverage is provided pursuant to state insurance law or through a federal, state or local government plan, the individual denied AEI status may appeal to the Department of Health and Human Services (“HHS”). HHS also recently posted an application and instructions similar to those provided by the DOL. This application can be found here.