On March 17, 2010, the Department of Labor ("DOL") published model notices to help plan administrators and employers comply with the revised notice requirements under the Temporary Extension Act of 2010, (the "Act") which, among other things, extends the eligibility period for the COBRA premium subsidy (the "Subsidy") introduced last year in the American Recovery and Reinvestment Act of 2009 ("ARRA") and expands the definition of a qualifying event for purposes of the Subsidy. Previously, the DOL published two versions of model notices ("Prior Notices") related to the introduction of the Subsidy under ARRA and secondly, the Department of Defense Appropriations Act, 2010 ("DODA"). These newly-published model notices revise the Prior Notices and should be used in place of the Prior Notices. Under the requirements of the Act, updated notices must be sent to certain current and former participants and their dependents as described below. Plan administrators and employers will likely find the DOL's model notices helpful when preparing their own notices, but may need to customize the notices to fit their organization's specific needs and circumstances.

In conjunction with changes to the Prior Notices, the DOL also introduced new notices to reflect the Act's notice requirements. Employers should take care to ensure that the proper notice goes to the proper group of individuals.

Below is a description of each model notice prepared by the DOL as well as a link to each.

1.  General Notice   Plans subject to federal COBRA must provide the updated General Notice to all qualified beneficiaries, not just covered employees, who experience a qualifying event between September 1, 2008 through March 31, 2010, and who have not yet received an election notice. These individuals must be provided the General Notice regardless of the type of qualifying event that has occurred. The General Notice provides revised information on qualification for the Subsidy as well as the standard information required in a COBRA election notice. Additionally, individuals who experienced a qualifying event (that was a termination of employment) on or after March 1, 2010 may not have been provided proper notice. These individuals should get the General Notice and the full 60 days from the date the General Notice is provided to elect COBRA coverage.

2.  Notice of New Election Period  Plan sponsors (or insurers, if applicable) that are subject to continuation coverage under federal or state law should provide the Notice of New Election Period to individuals who:

• experience a qualifying event that was a reduction in hours at any time from September 1, 2008 through March 31, 2010;
• subsequently experience a termination of employment at any point from March 2, 2010 through March 31, 2010; and
• either did not elect continuation coverage when it was first offered or elected but subsequently discontinued the coverage.

Individuals who experience an involuntary termination of employment after experiencing a qualifying event that consists of a reduction of hours must be provided this notice within 60 days of the termination of employment.

3. Supplemental Information Notice  Plan sponsors (or insurers, if applicable) that are subject to continuation coverage provisions under federal or state law should provide the Supplemental Information Notice to all individuals who elected and maintained continuation coverage based on the following qualifying events:

• terminations of employment that occurred at some time on or after March 1, 2010 for which notice of the availability of the Subsidy was not given; or
• reductions of hours that occurred during the period from September 1, 2008 through March 31, 2010 which were followed by a termination of the employee's employment that occurred on or after March 2, 2010 and by March 31, 2010.

Individuals who experience an involuntary termination of employment after experiencing a qualifying event that consists of a reduction of hours must be provided a Supplemental Information Notice within 60 days of that termination. Individuals with qualifying events that occurred on or after March 1, 2010 for which notice of the availability of the Subsidy was not given must be provided a Supplemental Information Notice before the end of the required time period for providing a COBRA election notice.

4. Notice of Extended Election Period   Plan sponsors (or insurers, if applicable) that are subject to continuation coverage provisions under federal or state law must provide, before the end of the required time period for providing a COBRA election notice.

• experienced a qualifying event that was a termination of employment at some time on or after March 1, 2010;
• were provided notice that did not inform them of their rights under ARRA, as amended by the Act; and
• either chose not to elect continuation coverage at that time or elected continuation coverage but later discontinued it.

5. Updated Alternative Notice   Insurance issuers that provide group health insurance coverage under state continuation coverage laws must send an updated alternative notice ("Updated Alternative Notice") to individuals who became eligible for continuation coverage under state law requirements through March 31, 2010. These continuation coverage requirements vary by state and issuers should modify the Updated Alternative Notice to conform it to the requirements of the applicable state. The DOL has stated that insurance issuers subject to state law requirements may use any of the other notices described above as they apply.

If you have any questions regarding the preparation of these notices, please contact a member of Parker Poe's Employee Benefits and Executive Compensation group.