In order to inform group health participants about the availability of coverage through the Health Insurance Marketplace, the Department of Labor (DOL) posted updates to three model notices, a proposed regulation change regarding notices, and a new FAQ. The Department of Health and Human Services (HHS) also posted a Bulletin regarding enrollment in the Marketplace. Information and links are provided below.
Updated Model COBRA Notices
The DOL posted an updated model COBRA general notice and a revision to the previously updated model COBRA election notice. These updates provide information to ensure awareness of the Marketplace as an alternative to electing COBRA continuation coverage and the factors a qualified beneficiary should consider in deciding which coverage to elect. Keller has updated our COBRA Compliance Kit to include the new forms.
Along with the updated models, the DOL posted a Notice of Proposed Rulemaking to add the new Marketplace information to the required COBRA notice information. Until the proposed rulemaking is final, the new model notices are recommended and considered “good faith compliance”, but are not required at this time. If you administer COBRA in-house and would like to start using the updated notices, please contact your Keller account team for an updated COBRA Kit.
COBRA and Health Insurance Marketplace Special Enrollment Periods
Plan participants who lose coverage due to a COBRA qualifying event must still be offered COBRA continuation coverage if the employer sponsoring the group health plan is subject to COBRA. COBRA provides continued coverage for a limited duration, and generally must be elected within 60 days of receiving the Election Notice.
Alternatively, as described in the updated model notices, plan participants can purchase coverage through the Health Insurance Marketplace within 60 days of the loss of group health plan coverage.
Enrollment in the Health Insurance Marketplace is limited to the following times:
Þ During the annual Marketplace enrollment period, for coverage effective January 1.
Þ During a special enrollment period due to certain specific triggering events, such as: involuntary loss of minimum essential coverage, gaining or becoming a dependent (e.g., marriage, birth, adoption), gaining citizenship, change in eligibility for the premium tax credit, and other exceptional circumstances.
If an individual elects COBRA when group health plan coverage is lost, the individual will have to wait to purchase Marketplace coverage until either the next Marketplace open enrollment period, the COBRA maximum duration is exhausted, or upon experiencing another triggering event.
Loss of employer contributions towards COBRA coverage is not a triggering event to purchase Marketplace coverage. Therefore, employers that offer paid COBRA premiums for less than the full COBRA period as part of a severance package may want to take this into consideration when determining if and how long to pay for COBRA premiums.
The HHS issued a special Bulletin to clarify and expand the triggering events and provide additional hardship exemptions for those without coverage. For instance, HHS recognizes that there may have been confusion about when COBRA participants can enroll in the Marketplace. Therefore, the Bulletin provides a one-time special enrollment period, through July 1, 2014, for COBRA participants to drop COBRA coverage and elect federally-facilitated Marketplace coverage. COBRA participants residing in a state with a state-based Marketplace (including DC and MD) should check with their state to see if the state will allow this additional special enrollment period.
Updated Model CHIP Notice
The DOL updated its website with a revised model Children’s Health Insurance Program (CHIP) Notice to include the availability of the new Health Insurance Marketplace. On an annual basis, employers must provide this notice to employees who live in states with CHIP premium assistance. For Keller clients who use our benefits guide or brochure, please contact your Keller account team for an updated version.
New Affordable Care Act FAQ
More complete information on all of the above information can be found on the DOL website in the latest “FAQs about Affordable Care Act Implementation (Part XIX)”. If you have any questions, please do not hesitate to contact your Keller account team.