May 12, 2014
The Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, the Agencies) recently issued several pieces of guidance regarding COBRA to clarify the impact of the establishment of the Health Insurance Marketplace (Marketplace) under the Affordable Care Act (ACA) that became effective January 1, 2014:
Under COBRA, group health plans must provide qualified beneficiaries with certain notices explaining their COBRA rights.
In conjunction with the proposed regulations released on May 2, 2014, the DOL has updated its model notices that plans may use to satisfy these notice requirements. According to the DOL, some qualified beneficiaries may want to consider and compare alternatives to COBRA coverage, such as coverage that is available through the Marketplace as they may be eligible for a subsidy and may find that Marketplace coverage is more affordable than COBRA.
The model general notice now includes basic information about Marketplace coverage and provides a web address for more information. The model election notice, which was already revised in 2013 to include basic Marketplace information, now includes more detailed information about Marketplace coverage, enrollment opportunities and restrictions, financial assistance, and factors to be considered in deciding between COBRA, Marketplace coverage, or other alternatives. An unrelated item of interest in both notices is a new instruction page that, among other things, confirms that the Paperwork Reduction Act Statement need not be included on the notices provided to plan participants.
Until the proposed regulations are finalized and effective, the DOL will consider use of the model notices, which are available on its website (links below), appropriately completed, to constitute compliance with COBRA's notice content requirements.
CHIPRA permits states to offer eligible low-income children and their families a premium assistance subsidy to help pay for employer-sponsored group health coverage. Under CHIPRA, if an employer's group health plan covers residents in a state that provides a premium subsidy, the employer must send an annual notice about the available assistance to all employees residing in that state. The DOL has issued a model notice that employers can use to comply with CHIPRA. On May 2, 2014, the DOL revised this model notice to include updates related to Marketplace coverage.
There is a limited special enrollment period for individuals who are already eligible for or enrolled in COBRA coverage. Based on concerns that the previous model notices did not sufficiently address Marketplace options, affected individuals will have through July 1, 2014 to enroll in coverage through a Federally-facilitated Marketplace. The bulletin reiterates that qualified beneficiaries who elect COBRA are generally able to enroll in a Marketplace only during open enrollment (or an applicable special enrollment period) or upon expiration of their COBRA maximum coverage period.
The model general notice is available at http://www.dol.gov/ebsa/modelgeneralnotice.doc
The model election notice is available at http://www.dol.gov/ebsa/modelelectionnotice.doc
The FAQs can be found at http://www.dol.gov/ebsa/faqs/faq-aca19.html
The CMS Bulletin is available at http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/SEP-and-hardship-FAQ-5-1-2014.pdf and proposed regulations are available at http://www.gpo.gov/fdsys/pkg/FR-2014-05-07/pdf/2014-10416.pdf
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