DOL Close to Issuing Appeals Form for ARRA COBRA Premium Subsidy Program
The U.S. Department of Labor is proposing a detailed form for alleged “assistance-eligible individuals” to use to appeal an employer’s denial of the COBRA premium subsidy entitlement under the American Recovery and Reinvestment Act of 2009 (ARRA), and has asked for quick government approval so that the agency’s expedited review process for subsidy denials can begin later this month.
DOL Close to Issuing Appeals Form for ARRA COBRA Premium Subsidy Program
The U.S. Department of Labor (DOL) is proposing an approximately 12-page application for individuals to use to appeal an employer’s denial of the COBRA premium subsidy entitlement, and has asked the U.S. Office of Management and Budget (OMB) to quickly approve the form so that the agency’s expedited review process for subsidy denials can begin later this month.
Background
The economic stimulus law, the American Recovery and Reinvestment Act of 2009 (ARRA), includes a 65-percent subsidy for COBRA premiums paid by “assistance-eligible individuals” (AEIs) who lose group health plan coverage due to a covered employee’s involuntary termination from employment at any time from Sept. 1, 2008, through Dec. 31, 2009. The law’s provisions anticipate that there could be disagreements about someone’s AEI status; accordingly, it requires DOL (or the U.S. Department of Health and Human Services for non-ERISA COBRA coverage) to provide for an expedited review for individuals who were denied subsidy eligibility status “by reason of such individual’s ineligibility for COBRA continuation coverage.”
The government is supposed to decide these appeals and respond within 15 business days after receipt of the application form. The government’s review is “de novo”; it does not have to defer to the employer’s decision and can make its own determination, to which any reviewing court must defer.
Shortly after the law’s passage, DOL noted that it was working on an appeals form, to be completed online or faxed, and which would “soon” be available at www.dol.gov/COBRA. The DOL has developed a draft form and is one step closer to finalizing it. In the May 4, 2009, Federal Register (74 Fed. Reg. 20503), DOL published an information collection request (ICR) for an emergency review by OMB. DOL is requesting that OBM approve the form by May 15, 2009. In the ICR, DOL estimates that 95,000 individuals will file an appeal, and notes that it is requesting emergency processing in order to implement the expedited review program on a timely basis as required by ARRA.
Details on Draft Form
The draft form first provides general information on the subsidy law, including the requirements individuals must meet to be AEIs, namely: (1) they were covered by the employer’s group health plan on the last day of the employee's employment; (2) there is an ongoing health plan responsible for providing COBRA coverage; (3) an employee's job termination was involuntary and occurred between Sept. 1, 2008, and Dec. 31, 2009; or (4) they are eligible for COBRA at any time during that period due to the employee’s job loss and not divorce, legal separation, entitlement to Medicare, loss of dependent status, or death of the covered employee.
The form then requests detailed contact information for the applicant, including the date of termination of employment and health coverage, and the names of any dependents for whom the applicant is also requesting a determination. Next, the form requests detailed eligibility information, as noted below.
Eligibility
The draft form asks the applicant 10 questions to further determine subsidy eligibility. The first four questions are based on the requirements noted above, and the form notes that answering “No” to questions 1-4 means the applicant may not be eligible for the subsidy. The remaining questions are paraphrased below:
Q5. Was your or your family member’s job termination involuntary? Yes No Unsure or N/A.
a. Was it a permanent layoff?
b. Was it a layoff with possible recall or a temporary furlough?
c. Was it a buyout or severance package in anticipation of a layoff?
d. Did the employee resign as a result of a change in the geographic location of employment?
e. Did the employee’s employment end while the employee was absent due to illness or disability?
f. Other (to be described in the application’s “Other Information” box).
Q6. Did you or your family member work for the federal government, a state or local government, or a church?
Q7. Do you believe that your or your family member’s former employer had 20 or more employees in the calendar year prior to the employee’s job termination?
Q8. Regarding COBRA coverage:
a. Did you receive a notice informing you of your right to elect COBRA?
b. Did you send in a form requesting, or electing, COBRA coverage?
c. Were you denied COBRA coverage? (A “yes” answer is to be explained in the application’s “Other Information” box.) Attach copies of all relevant documents.
Q9. Regarding the COBRA premium reduction:
a. Did you receive a notice informing you of your right to a premium reduction?
b. Were you denied the premium reduction? (A “yes” answer is to be explained in the application’s “Other Information” box.) Attach copies of all relevant documents.
Q10. At any time after you or your family member became unemployed were you (or any dependents) eligible for coverage under any other group health plan (such as a plan sponsored by a later employer or a spouse’s employer) or Medicare? If yes, please note the date you (or any dependents) became eligible for the other coverage.
Other Information
The draft form requests detailed contact information for the employer (to include any parent company or acquiring company), plan sponsor and/or insurer, as applicable, and asks the applicant to explain the reason(s) for the denial of COBRA coverage and/or the premium reduction as well as any other information believed important in order for DOL to evaluate the application. The form notes that since DOL review cannot begin until it has a complete application, the applicant is to attach copies of documentation that will assist DOL in making a determination, which can include: (1) the COBRA election notice, (2) the “Request for Treatment as an Assistance Eligible Individual” or other form used to request the premium reduction; (3) the insurance card; (4) payroll stubs showing deductions for health benefits; (5) any documents detailing the date and circumstances of the termination of the employee’s employment; or (6) any documentation provided regarding the denial of the premium reduction.
CMS Application
The Centers for Medicaid and Medicare Services issued a similar ICR for the appeals process related to non-ERISA plans. To access the CMS material, go to http://www.cms.hhs.gov/PaperworkReductionActof1995/PRAL/list.asp#TopOfPage and click on CMS 10285.
For More Details
A copy of the DOL's ICR may be obtained from the RegInfo.gov Web site at http://www.reginfo.gov/public/do/PRAMain or by contacting Darrin King on 202-693-4129 (this is not a toll-free number)/e-mail: DOL_PRA_PUBLIC@dol.gov. Comments should be received five days before the requested OMB approval and can be e-mailed to OIRA_submission@omb.eop.gov. The Web site above has details on the type of comments that OMB is interested in.
