On December 19, 2009, President Obama signed the Department of Defense Appropriations Act, 2010 ("DDAA") which, among other things, extended and expanded the COBRA premium subsidy established last year. (See our prior reports from February 19, March 19, April 8, and December 23, 2009). On January 13, 2010, the U.S. Department of Labor ("DOL") issued new model COBRA notices that incorporate the changes from the DDAA. The new notices can be found here. The updated General Notice should be used going forward whenever a COBRA notice is required.

The new Premium Assistance Extension Notice should be sent to the following individuals: (1) those who were "Assistance Eligible Individuals" and receiving the COBRA subsidy as of October 31, 2009; (2) those who were involuntarily terminated after October 31, 2009 and lost health benefits coverage, but have not been provided with the updated General Notice; and (3) those in a "transition period," i.e., those whose COBRA subsidy ended because they had exhausted the original number of months (generally nine months), but are entitled to continue the subsidy given that the DDAA extended the duration of the subsidy to 15 months.  

Those in Groups (1) or (2) generally should receive the Premium Assistance Extension Notice by February 17, 2010, and those in Group (3) should receive the Premium Assistance Extension Notice within 60 days after their original COBRA subsidy ended. To the extent individuals may fall within more than once category, the Premium Extension Notice should be sent to them by the earliest of the possible due dates.

A third new notice, the Updated Alternative Notice, should be used by insurers who provide continuation coverage under a state law.