DATE: April 17, 2009
ATTENTION: Human Resources and Payroll Officers, Business Managers
SUBJECT: New Requirements for COBRA Notices

The economic stimulus law, known as the American Reinvestment and Recovery Act of 2009 ("ARRA") imposes new requirements on employers for continuation of health insurance benefits to employees involuntarily terminated between the dates of September 1, 2008 through December 31, 2009. This memorandum explains the procedures to be followed by all State agencies and attaches the sample notice to be used for employees separating from service on and after the date of this Memorandum.

Under existing law an employee separating from service has a 60-day period within which to elect to continue health insurance coverage. The separated employee must pay the entire cost of the premium. These conditions are explained in the standard COBRA Notice generated by CORE-CT upon an employee's separation from service.

The ARRA provides a temporary reduction of health insurance premiums for employees involuntarily terminated between September 1, 2008 and December 31, 2009. Eligible individuals (including dependents enrolled in coverage at the time of termination) who elect to continue health insurance coverage will pay only 35 percent of the normal premiums for up to 9 months.

Employers are required to give employees who were involuntarily terminated on or after September 1, 2008, information about obtaining a temporary premium reduction and provide an additional 60-day period to elect COBRA continuation by April 18, 2009.

The Office of the State Comptroller, Healthcare Policy and Benefit Services Division mailed the required notices to State employees who were involuntarily terminated between the dates of September 1, 2008 and February 16, 2009. The Division will also send Notices to those employees whose involuntary termination was processed after February 16, 2009 and before April 20, 2009.

For terminations processed on and after April 20, 2009, the employing agency must provide the ARRA-required notices to all employees who are separating from service as the result of an involuntary termination. The Internal Revenue Service has issued guidance on what constitutes an "involuntary termination". Based on that guidance, the Division has identified the Action/Reason codes that can be used to identify personnel actions that may qualify as involuntary terminations.


Upon an employee's separation from service for any reason, the agency must provide the standard COBRA Notice currently generated by CORE-CT. Where the reason for separation is considered an involuntary termination and coded as such by the agency, a supplemental ARRA-COBRA notice must also be provided to the employee and any enrolled family member or dependent(s) entitled to receive COBRA continuation coverage. A copy of the required supplemental notice (C_COBRAgeneralstateofct_Revised.doc) and subsidized rate chart (arra_cobra_rates_2008-09.doc) are attached. (You can also download a copy as a Word document from our website). The agency must fill in the employee's Name, Address, Department ID, and Employee ID on the REQUEST OF TREATMENT AS AN ASSISTANCE ELIGIBLE INDIVIDUAL for use in identifying the employee by the Division.


Qualification for the ARRA subsidy is limited to those who were involuntarily terminated who are not currently eligible for group insurance coverage or Medicare, and who make the election for such coverage within 60 days. Enrolled dependents/family members who lose coverage due to an employee's involuntary termination are also eligible for the subsidy.

According to IRS guidance on the ARRA, "involuntary termination" means a severance from employment due to the employer's exercise of unilateral authority to terminate employment other than due to the employee's request. Examples of an "involuntary termination" include: an involuntary reduction to zero hours, whether through layoffs, suspension or furlough, failure to renew a contract after its expiration date if the employee was willing to continue providing services; resignation due to employer action that causes a material negative change in the employment relationship (such as reduction in hours or pay). An involuntary termination may include terminations for cause so long as the employee has not engaged in "gross misconduct". An "involuntary termination" does not include absence from work due to illness or disability.

Going forward, individual agencies must provide the ARRA-required notices to all employees who are separating from service as the result of an involuntary termination. The Department of Administrative Services (DAS) has provided a list of the most commonly used Reason codes to identify personnel actions that may qualify as involuntary terminations under the IRS guidelines: Employees whose reason for separation from service received the following Reason codes should be given the ARRA-COBRA notice:

Action Reason
TERM DSC Discharge
TERM FWT Failure of Working Test Period; Return to Layoff/Reempl List
TERM LAY Layoff Due to Lack of Work
TERM LEX Leave Expired, Not Extended
TERM NDT Non-Disciplinary Termination
TERM NRC Non-Renewal of Contract
TERM PDR* Pending Disability Retirement
TERM UAD Unclassified Appointment Discontinued
TERM UWT Unsatisfactory Working Test Period

* Only upon Termination of Health Benefits

This is a preliminary list. There may be other Action/Reason codes that will be determined to qualify as an involuntary termination under the IRS guidelines, which require consideration of all the facts and circumstances. If you are in doubt, issue the ARRA-COBRA notice.

Terminating employees who elect to continue coverage without claiming eligibility for any premium subsidy under the ARRA will still submit the Health Insurance Continuation Election Form attached to the standard COBRA notice to:

Anthem Blue Cross and Blue Shield
COBRA Continuation Unit
P.O. Box 719
North Haven, CT 06473-0719
(800) 433-5436

Involuntarily terminated employees (or dependents of such employees) who assert entitlement to a premium subsidy should submit the Health Insurance Continuation Election Form and a Request for Treatment as an Assistance Eligible Individual to:

Office of the State Comptroller
Healthcare Policy and Benefit Services Division
Attention: ARRA COBRA
55 Elm Street
Hartford, CT 06106-1775

In consultation with the agency, the Division will then determine whether the former employee or qualified beneficiary(ies) are eligible for a premium subsidy based upon the nature of the termination from employment. Where the former employee is deemed eligible for premium assistance, the Division will direct the State's COBRA administrator to bill continuation premiums at 35 percent. Where eligibility is denied, the Division will notify the affected individuals.

If you have questions concerning this memorandum, please contact William Morico of the Healthcare Policy & Benefit Services Division, at 860-702-3539 or send an email to




Enclosure:   C_COBRAgeneralstateofct_Revised.doc

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