Western Health Advantage (WHA) COBRA Subsidy Answers

WHA Statement of Position:

The American Recovery and Reinvestment Act of 2009

Federal Premium Subsidy for Eligible COBRA Beneficiaries

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a federal subsidy covering 65% of the COBRA premium for eligible individuals whose employment is involuntarily terminated between September 1, 2008 and December 31, 2009. This effectively allows a special second election offer opportunity for those eligible beneficiaries who do not have COBRA elections in effect as of February 17, 2009; the date the act was signed into law. Notices must be sent to all Assistance Eligible Individuals. The new law applies to employers covered by Federal COBRA, to those subject to state health coverage continuation laws (e.g. Cal-COBRA) and government employers.

Employers that qualify under Cal-COBRA

In order to ensure a smooth and quick implementation of these new regulations, Western Health Advantage (WHA) is prepared to completed the following tasks:

• By 4/1/09, WHA will update our standard COBRA Election forms to include the new language pertaining to the subsidy for any new termination requests received.
• By 4/15/09, WHA will mail the "special second election letters" to the reported terminations between 9/30/08 and current.
• The qualified beneficiaries (former employees and their dependents) will have 60 days to respond to the above notice. Once the notice is returned and if the beneficiary requests the subsidy, WHA will contact the Employer. The Employer is then required to provide an attestation that the employee was in fact terminated involuntarily and therefore is eligible for the subsidy. This attestation must be returned within 2 working days.
• WHA will bill the appropriate amounts to each applicable beneficiary and will be responsible for the payroll tax credit. Nothing further is needed from the Employer.
• There will be no other changes to the current administration of COBRA.
• Employers are required to submit an attestation with any eligible future termination notice. A general attestation will be available to download on our website.

Employers that qualify under Federal COBRA

Employers that qualify under Federal COBRA continue to be responsible for the full administration of COBRA including the new processes required under ARRA. WHA will continue to bill the employer or delegated entity for the 100% of the premium and it is up to the employer to pay that full amount to the health plan. We will also continue to process changes as reported.

Upon request, WHA is able to create additional billing accounts in order to separate these eligible subsidy beneficiaries.