Frequently asked questions about the COBRA premium subsidy

COBRA, an acronym for Consolidated Omnibus Budget Reconciliation Act, is legislation passed by congress in 1986 establishing coverage continuation rules for group health plans.

A provision in the American Recovery and Reinvestment Act (ARRA), effective Feb. 17, 2009, providing COBRA premium assistance to employees who lose their jobs involuntarily between Sept. 1, 2008, and Dec. 31, 2009. In 2010, the period of coverage was extended to Mar. 31, 2010, and then to May 31, 2010.

The COBRA subsidy provides premium assistance to an employee and eligible dependents enrolled in the plan before the employee was involuntarily terminated. Premium assistance is not available for domestic partners or the children of domestic partners because they are not recognized as eligible dependents under federal law.

You will receive a COBRA enrollment packet from our third-party administrator, FBMC, after your last day of employment. Your COBRA packet will indicate whether or not you are an assistance-eligible individual.

Your COBRA packet will include enrollment forms that you must sign and return to FBMC. You will have 60 days from either your last day of coverage or the postmark on the COBRA packet envelope to enroll. You will have 45 days from the date of your election to submit payment; however we recommend including your payment with your enrollment form.

After you're enrolled, your coverage will be effective beginning on Mar. 1, 2009, or on the first of the month following your last day of county-paid coverage, whichever is later.

Qualified individuals will receive a 65-percent COBRA medical premium subsidy. A refund or credit will be applied to COBRA premiums paid on or after Mar. 1, 2009, but not before that date.

The premium assistance can continue for a maximum of 15 months, but it does not extend the maximum COBRA-eligibility period of 18 months.

The subsidy applies to any health plan, except flexible spending accounts (FSAs). If an employee is enrolled in a bundled plan (medical, dental and vision combined), then the subsidy applies to the medical premium only. If an employee is enrolled in a stand-alone plan, such as dental only or vision only, then the subsidy will apply to the dental premium or the vision premium, respectively.

Employees involuntarily terminated between Sept. 1, 2008, and Feb. 16, 2009, who are not currently enrolled in COBRA, may be eligible to elect COBRA effective Mar. 1, 2009, during a special election period. The county’s COBRA administrator, FBMC, has already contacted these individuals regarding their enrollment rights.

The subsidy will be discontinued when a covered individual becomes eligible for Medicare or another group health plan during the 15-month period, or if the COBRA period expires.

You may be subject to a federal tax penalty of 110 percent of the premium reduction improperly received.

Former employees who believe they are eligible for the COBRA premium subsidy should contact FBMC at 1-800-342-8017 on weekdays from 4 a.m. to 7 p.m. Pacific.

Employees who are notified that they are not eligible for the COBRA subsidy have a right to appeal the decision with the U.S. Department of Labor by completing and submitting an application form. The form will soon be available at www.dol.gov/COBRA and can be completed online or mailed or faxed as indicated in the instructions.

Employees are encouraged to contact the Department of Labor only after being notified by FBMC that they are not eligible for the subsidy. Before completing the Department of Labor application form, employees should consider speaking with an Employee Benefits Security Administration benefits advisor at 1-866-444-3272.