The Obama administration announced updates to model notices that employers must provide to employees, informing workers of their eligibility to continue health care coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA).
Most employers do not realize that COBRA notices MUST be provided at the start of employment. Workers and their families who are eligible for employer-sponsored coverage generally must be informed of their right to COBRA continuation coverage at the start of employment. They must also be informed of their right to purchase COBRA coverage when separating from a job. The proposed changes to the model notices would offer information on more affordable options available through the Marketplace, where workers and families may be eligible for financial assistance that would not otherwise be available for COBRA continuation coverage.
The Department of Labor (DOL) on May 2, 2014, released a new model general notice form and model election notice form for providing COBRA notices to employees. The updated notices make it clear to workers that if they are eligible for COBRA continuation coverage when leaving a job, they may choose to instead purchase coverage through the Affordable Care Act’s (ACA) Health Insurance Marketplace, as the government-run exchange is formally known. Employees directed to the public exchange/Marketplace, where they may qualify for federal subsidies, are less likely to feel they need to pay the full premium to continue with their former employer’s health coverage through COBRA.
The DOL, along with the departments of Health and Human Services (HHS) and Treasury, also published frequently asked questions related to the proposed changes to model notices. The FAQs are cross-posted on the DOL website and on the HHS website. In addition, HHS published a clarifying bulletin regarding a special enrollment period in the Marketplace for individuals already enrolled in COBRA continuation coverage and COBRA qualified beneficiaries (typically the departing employee’s spouse and children). The guidance encourages state-run health insurance exchanges to provide similar special enrollment periods for COBRA beneficiaries.
