U. S. Office of Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter 

 

Number: 09- 202 Date: March 19, 2009 

Subject: Assistance for certain employees who are eligible for Temporary Continuation 

 of Coverage (TCC) based on Public Law 111-5

Public Law 111-5, the American Recovery and Reinvestment Act (ARRA) of 2009, was signed into 

law by President Barack Obama on February 17, 2009. This Benefits Administration Letter 

(BAL) provides information regarding the law’s impact with respect to Federal Employees Health 

Benefits (FEHB) Program administration and a model notice and application/certification form for 

you to provide to your affected former employees and terminating employees. 

Certain former employees eligible for premium assistance: Title III of Division B of ARRA 

provides that employees who are involuntarily terminated between September 1, 2008, and 

December 31, 2009, may receive premium assistance from their past employer for their temporary 

continuation of coverage (TCC). The term "involuntary termination," as used in ARRA, includes 

an employee who is involuntarily separated from service, except if the termination is for "gross 

misconduct," as defined by the TCC statute, 5 U.S.C. 8905a(b)(1)(a), and implementing 

regulations. 

The premium assistance, which represents 65 percent of their health insurance premiums for up to 

nine months, terminates if they become eligible for other group health coverage or Medicare or 

they reach the end of their 18-month coverage under TCC. Note that “group health coverage” in 

this instance does not include limited coverage such as that consisting of only dental, vision, 

counseling, or referral services; coverage under a health care flexible spending arrangement; 

coverage of treatment that is furnished in an on-site medical facility maintained by the employer 

and that consists primarily of first-aid services, prevention and wellness care, or similar care; or a 

combination of any of the above. 

Notification to former employees: Agencies must identify former employees who qualify for 

TCC based on an involuntarily termination that occurred on or after September 1, 2008, even if 

they did not elect to enroll in TCC, and provide notice regarding their potential eligibility for 

premium assistance within 60 days of the signing of the Act. Three model notices are attached for 

your use (Attachment A). Use the notice meeting the specific situation of the employee. We 

strongly suggest you do not change the notice, since it is based on the ARRA requirements. 
Individuals who already have experienced an involuntary termination that occurred on or after 

September 1, 2008, which entitled them to elect TCC coverage, fall into two groups: 1) those who 

elected TCC when they separated from service; and 2) those who did not. In addition to 

requesting premium assistance, the first group also may elect to change plans. The newly elected 

plan must have the same or lower premiums than the plan in which they were enrolled at the time 

of involuntary termination and must be available to non-TCC active employees at the time of 

election. Premium assistance is retroactive to the first period of coverage on or after February 17, 

2009, except for individuals who must change to a plan with a lower premium in order to qualify 

for the premium assistance, in which case the assistance shall be prospective only. Premium 

assistance for the first group will end at the earlier of 9 months, the remaining time of their TCC 

eligibility, or until the individual becomes eligible for other group health coverage or Medicare. 

The second group must be given a new opportunity to elect TCC. The extended election period 

begins on the date of enactment and ends 60 days after the date the agency provides the required 

notice. TCC will be effective retroactive to the first period of coverage beginning on or after 

February 17, 2009, and shall not extend beyond the period of TCC that would have been allowed 

under applicable TCC provisions if coverage had been elected during the former employee’s 

initial opportunity to enroll in TCC. Premium assistance for the second group will end at the 

earlier of 9 months of payment of the assistance, the remaining time of their TCC eligibility based 

on their employment termination date, or until they become eligible for other group health 

coverage or Medicare. 

Newly terminating employees, whose separation dates are on or before December 31, 2009, 

should receive the notice and be given an opportunity to elect TCC and request premium 

assistance. 

Please note that ARRA does not extend TCC coverage beyond the normal 18-month limitation 

stated at 5 CFR 890.1107. 

A request for premium assistance must be received within 60 days of the agency’s notice to the 

individual. A request to enroll in a different plan must be received within 90 days of the agency’s 

notice to the individual. 

Individuals who request premium assistance must certify they are eligible for the assistance. A 

sample request/certification is attached (Attachment B). You should send it along with your 

notice and a Standard Form 2809 (SF 2809) to potentially eligible individuals. It must be returned 

with the SF 2809 to the agency. Agencies should use the Remarks section of the SF 2809 to state 

1) the effective date of the former employee’s TCC and 2) the effective date of the former 

employee’s premium assistance. 

Former employees must notify their health plan and their former employing agency if they become 

eligible for other coverage which would disqualify them from continuing to receive premium 

assistance as described above. Failure to make this notification may subject the individual to a 

penalty of 110 percent of the premium reduction provided. Eligible individuals may also decline 

to request premium assistance. 

Cost of Premium Reduction: Assistance-eligible individuals who elect TCC will pay 35 

2
percent of the TCC premium for their FEHB plan. The TCC premium is the sum of the 

FEHB plan premium and the two percent administrative charge. Former employing agencies 

will pay the remaining 65 percent balance. Attachment C provides a rate chart reflecting 

these amounts for your use. Agencies may use Internal Revenue Service (IRS) Form 941 to 

receive a credit on their payroll taxes for the premium assistance paid on behalf of former 

employees. The IRS has provided guidance with respect to this credit at the following: 

www.irs.gov/newsroom/article/0,,id=204709,00.html. 

Agency Reporting Requirements: Agencies also will be responsible for periodically reporting the 

following information: 1) the number of individuals provided premium assistance; 2) the average 

dollar amount (monthly and annually) of premium reductions provided to such individuals; 3) the 

total amount of expenditures incurred (with administrative expenditures noted separately) in 

connection with premium reduction; and, 4) additional reporting requirements as defined by the IRS. 

For questions regarding this BAL, please contact Ed DeHarde, Senior Policy Analyst, Insurance 

Policy Group, Strategic Human Resources Policy, at Edward.DeHarde@opm.gov or at 

202.606.0004. Thank you for your assistance. 

 Sincerely, 

Kathleen M. McGettigan 

Deputy Associate Director 

Center for Retirement and Insurance Services 

Attachments 

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