Additional Information COBRA Continuation Coverage Assistance Under The American Recovery and Reinvestment Act Of 2009
The American Recovery and Reinvestment Act of 2009 (ARRA) entitles COBRA qualified beneficiaries who experienced an involuntary termination of employment between September 1, 2008 and May 31, 2010 to a partially subsidized (65%) COBRA premium for a maximum period of 15 months. The Act also includes individuals who had a reduction of hours COBRA qualifying event beginning September 1, 2008 followed by an involuntary termination of employment that occurred between March 2, 2010 and May 31, 2010.
SUBSIDY DETAILS IF YOU ARE ELIGIBLE FOR THE SUBSIDY Premium Subsidy Details
During the premium subsidy period, the monthly premium for you and any dependents that had coverage at the time of your COBRA qualifying event will be 35% of the total monthly COBRA premium. The remaining 65% of the COBRA premium will be subsidized by the federal government through a payroll tax credit to your former employer.
You will need to refer to the enclosed COBRA Rate Sheet for specific premium information. The rates reflect the full premium charged by the insurance carriers plus an additional 2% administration fee. The rates charged during the subsidy period are also illustrated.
After the premium subsidy period has expired, the COBRA monthly premium will return to the full 102% rate as noted on the COBRA Rate Sheet.
The subsidized premium payment applies to the following COBRA qualified plans: medical, prescription drug, dental, vision, and Employee Assistance Programs (EAPs). The subsidized premium payment does not apply to Health Flexible Spending Accounts (FSAs).
Your payment due date and your coverage period may not run concurrently. Please refer to the coupons in your Premium Transmittal Coupon Book to verify the coverage period to which your payments will apply.
Premiums may be paid by direct debit from your bank account. Please contact Vita Administration Company for a Direct Debit Authorization form to initiate this payment method. Alternatively, premium may be paid by check or money order and mailed to Vita Administration Company. Credit card and cash payments are not accepted. All check and money order payments should be made payable to Vita Administration Company.
Domestic partners are not eligible for the federal subsidy.
RESTRICTIONS TO ELIGIBILITY Eligibility for Medicare or Other Group Medical
(including retiree coverage)
If you and/or your covered dependents become eligible for Medicare or another group medical plan (including eligibility to enroll onto a spouse’s group medical plan), before or during the premium subsidy period, you will no longer qualify for the reduced premium as of the date your new coverage could begin. Instead, you will be charged the full applicable premium for the remainder of the COBRA coverage period.
It is your responsibility to notify Vita Administration Company in writing if you become eligible for Medicare or another group medical plan. Failure to notify Vita can result in an IRS imposed penalty of 110% of the premium reduction after termination of eligibility.
High-Income Restrictions for Subsidy
If your household gross income is less than $125,000 for a single tax filing or $250,000 for a joint filing during the tax year in which you receive the federal COBRA subsidy, you qualify for the full federal COBRA subsidy.
If your household gross income is between $125,000 and $145,000 for a single tax filing or $250,000 and $290,000 for a joint filing during the tax year in which you receive the federal subsidy, you are eligible to receive the federal COBRA subsidy at a reduced percentage.
If your household gross income exceeds $145,000 for a single tax filing or $290,000 for a joint filing during the tax year in which you receive the federal COBRA subsidy, you do not qualify for the reduced premium.
You have the option to elect COBRA and pay the reduced premium even if you exceed the income requirements. When you file your federal tax return for the year in which you received the federal COBRA subsidy, the IRS will determine if you qualify as a High-Income Individual. If so, the IRS will recapture the federal COBRA subsidy through your tax filing.
You also have the opportunity to permanently waive the subsidy and pay the full applicable premium rate. You will need to indicate your intention to waive the premium subsidy on the enclosed Universal Election Form.
HOW TO APPEAL
If you have been denied eligibility for the federal premium subsidy because you were not identified as eligible by your former employer, you may request an expedited review of this denial by the U.S. Department of Labor (DOL). The DOL is required to make a determination within 15 days of the receipt of a completed request for review. Prior to contacting the DOL, we recommend that you contact your employer first. If you have questions regarding the appeal process you may contact the U.S. Department of Labor at:
Telephone: (866) 444-3272
Website: www.dol.gov/cobra
Mailing Address: Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210
REQUIRED FORMS AND PREMIUM PAYMENTS
To elect COBRA Continuation Coverage, you must sign and return a completed Universal Election Form to Vita Administration Company. Your election form must be postmarked within 60 days from the later of the date of the Qualifying Event, the coverage end date, or the date this notice was originally provided.
Timely response is required or your rights will be forfeited. If your completed Universal Election Form is not postmarked within the prescribed time guidelines, it will be assumed that you have declined your COBRA Continuation Coverage option.
You have 45 days from the date you postmark the Universal Election Form to pay any premiums incurred prior to your election. All future payments will be due the first day of the month, with a 30 day payment grace period. Please refer to the enclosed cover letter and Rights and Rules booklet for a list of the payment rules.
TERMINATION OF PREMIUM SUBSIDY PERIOD
The premium subsidy is for a limited time and will terminate the earliest of:
Fifteen months after the first day of the coverage period
The expiration of the period of coverage that would have been required if COBRA had originally been elected
The day coverage could become effective when eligible for Medicare or another group medical plan
The day your employer no longer maintains a group health plan
The end of the coverage period that your last payment was applied, if you do not make timely payment of your 35% premium
The date which the reduced premium period terminates and your COBRA Continuation Coverage terminates may be different. Please refer to the enclosed Right and Rules booklet for more information on how your COBRA Continuation Coverage may terminate.
HIPAA CREDITABLE COVERAGE
If you experience a gap in coverage due to the special COBRA election, the period of time from the date of the qualifying event to the beginning of coverage is disregarded for purposes of the 63-day break in creditable coverage rules under HIPAA.
CONTACT INFORMATION
If you have any questions or require further assistance in making an election, please contact Vita Administration Company directly at:
Telephone: (650) 966-1492
Email: cobra@vitamail.com
Fax: (650) 961-2285
Mailing Address: 900 North Shoreline Boulevard
Mountain View, CA 94043
California Department of Insurance License #0581175
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