Model COBRA Notices Updated to Reflect Marketplace Options
The Department of Labor recently issued new model COBRA notices which notifies eligible workers that they have the option to choose either traditional COBRA continuation coverage or coverage through the health insurance marketplaces/exchanges established pursuant to the Patient Protection and Affordable Care Act ("Marketplace").
Special Enrollment Periods
Generally, individuals may only enroll in qualified health plans on the Marketplace during annual open enrollment periods. However, applicable regulations provide that individuals eligible for COBRA may also enroll in a health plan on the Marketplace during a special enrollment period (SEP). SEPs occur: (1) when the individual initially becomes eligible for COBRA due to a loss of minimum essential coverage; (2) when the individual's COBRA coverage is exhausted; and (3) when the individual meets other exceptional circumstances as determined by the Marketplace (which includes having insufficient information to understand that Marketplace plans were an available alternative to COBRA coverage). Individuals previously affected by such an "exceptional circumstance" have until July 1, 2014 to contact the Marketplace call center and activate the SEP. Once their eligibility is determined, they can view the available plans and select a qualified health plan on the Marketplace.
The updated COBRA notices inform employees that purchasing coverage through the Marketplace may be a less expensive alternative to COBRA continuation coverage, as qualified beneficiaries may be eligible for a premium tax credit and/or cost-sharing reductions which may make Marketplace coverage more affordable. The updated notices inform eligible employees about their coverage options and explain how and when eligible employees must make COBRA or Marketplace elections. It is recommended that employers begin using these model notices as the Department of Labor indicates that utilization of these model notice will constitute good faith compliance with the notice requirements.
Both the updated model COBRA general notice (which must be provided when the employee first enrolls in an employer's health plan) and the model COBRA election notice (which must be provided to plan participants following a qualifying event) can be found at www.dol.gov/ebsa/cobra.html .
If you have any questions about the subject matter of this e-alert, COBRA, or health care reform in general, please contact Ed Hammond at firstname.lastname@example.org or (248) 988-1821; Kristi Gauthier at email@example.com or (248) 988-5854; or Doug Ellis at firstname.lastname@example.org or (412) 394-2367.