On May 7, 2014, the U.S. Department of Labor (DOL) issued proposed rules with amendments to the notice requirements under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The proposed amendments are intended to align the COBRA notice requirements with the Affordable Care Act (ACA) so that individuals who lose coverage under their employer’s plan understand that they have the option to either (a) purchase COBRA coverage; or (b) purchase coverage through the new ACA Health Insurance Marketplace, which may be more affordable than COBRA coverage. The proposed rules were accompanied by a new model election notice and general notice that employers may use to satisfy their COBRA notice obligations. (A new model Children’s Health Insurance Program notice was also issued.)
A few days before the DOL issued its proposed rules, the Department of Health and Human Services (HHS) also issued a new bulletin regarding COBRA. HHS is concerned that former model COBRA notices did not sufficiently explain the Marketplace options to persons eligible for COBRA. Thus, HHS is giving current COBRA-eligible individuals a one-time special period — through July 1, 2014 — to enroll in a qualified health plan through the Marketplace.
Right now, employers should, at a minimum: (1) update their COBRA general and election notices to include the new model language regarding Marketplace coverage; (2) notify current COBRA eligible individuals regarding their special, one-time right to enroll in Marketplace coverage through July 1, 2014; (3) review and revise their health plan’s COBRA communications, policies and procedures to include the availability of coverage in the Marketplace; and (4) update current plan’s summary plan description to include the option of Marketplace coverage.
If you have questions or need help with these action steps, please feel free to contact me, bbrown@thenoblegroup.com.