Overview
The American Recovery and Reinvestment Act (ARRA) gives “Assistance Eligible Individuals” the right to pay reduced COBRA premiums for periods of coverage beginning on or after February 17, 2009, and can last up to nine months. The premium reduction is available to certain individuals who experience a qualifying event that is an involuntary termination of employment during the period beginning with September 1, 2008, and ending with December 31, 2009. If you are an Assistance Eligible Individual and qualify for the premium reduction, you need only to pay 35 percent of the COBRA premium otherwise due the plan. This premium reduction is available for up to nine months. If your COBRA continuation coverage lasts for more than nine months, you will have to pay the full amount of premium to continue your COBRA continuation coverage. (Note: A domestic partner (same or opposite gender) or the child(ren) of a domestic partner are not eligible for the premium reduction, unless that individual is considered a dependent for federal tax purposes.)

Eligibility criteria to be considered an “Assistance Eligible Individual”

• You must be eligible for COBRA continuation coverage at any time during the period from September 1, 2008, through December 31, 2009;
• You must have a continuation coverage election opportunity related to an involuntary termination of employment that occurred at some time from September 1, 2008, through December 31, 2009;
• You must not be eligible for Medicare; and
• You must not be eligible for coverage under any other group health plan, such as a plan sponsored by a successor employer or a spouse’s employer.

What plans are eligible for the premium reduction
Aetna sponsored medical and/or dental plans that you and your eligible dependents were enrolled in at the time of termination are eligible for the premium reduction. A health care spending account is not eligible.

Other Considerations
If, after you elect COBRA and while you are paying the reduced premium, you become eligible for other group health plan coverage or Medicare, you must notify the COBRA Unit in writing. The COBRA unit will recalculate the total cost of your COBRA coverage minus the reduced premium for payment purposes going forward. If you do not notify the COBRA unit, you may be subject to a tax penalty.

Electing the premium reduction disqualifies you for the Health Coverage Tax Credit. If you are eligible for the Health Coverage Tax Credit, which could be more valuable than the premium reduction, you will receive a notification from the IRS.

The amount of premium reduction is recaptured for certain high-income individuals. If the amount you earn for the year is more than $125,000 (or $250,000 for married couples filing a joint federal income tax return), all or part of the premium reduction may be recaptured by an increase in your income tax liability for the year. If you think that your income may exceed the amount above, you may wish to consider waiving your right to the premium reduction. For more information, consult your tax preparer or visit the IRS webpage on ARRA at www.irs.gov.

How do I enroll for a premium reduction
If Aetna determines that you meet the criteria of an involuntary termination that occurred between September 1, 2008 and December 31, 2009, you will receive information in the mail (sent to your mailing address on record) that will assist you in enrolling in COBRA coverage as well the premium reduction program.