New Model COBRA Notice/Language Issued - Individuals Eligible for COBRA Have Special Enrollment Period
The Department of Labor (DOL) released a proposed regulation and updated model notices for employees and beneficiaries eligible for COBRA coverage last month.
The DOL and Department of Health and Human Services (HHS) were concerned that the prior model notice did not sufficiently address the Marketplace Health Insurance Exchange (the Marketplace) options for persons eligible for COBRA coverage. Accordingly, the new model notice of the availability of COBRA coverage more clearly indicates that persons eligible for COBRA have the option to buy an individual plan through the Marketplace, which may provide for lower costs and lower out-of-pocket costs. Therefore, the proposed regulation did three things.
First, the proposed regulation eliminates the existing model notices and makes technical changes so that it will be easier for the DOL to modify the models in the future. The attached "election" notice of coverage should be provided when a covered participant or beneficiary becomes eligible for COBRA. Use of the new model notices constitutes good faith compliance with the COBRA notice requirements.
Second, the proposed regulation provided updated model language for use in summary plan descriptions and certificates of insurance.
Third, HHS provided an additional special enrollment period for persons eligible for or on COBRA coverage in May and June. These people have until July 1 to enroll in qualified health plans in the Health Insurance Marketplace (state-based and Federally facilitated exchanges set up under the Affordable Care Act, or, simply the Marketplace).
Action to Take: Plans should review the model notice and language and make appropriate changes to their own notice or to their Summary Pan Description (SPD).
Cheiron Observation: The model notices are for use by single-employer group health plans. Multiemployer plans may want to use a modification of the models or to make changes to their existing notices. While updating your SPD or issuing a Summary of Material Modification is not currently required, Plans may want to consider this language if they are in the process of updating their SPD.
The model notices can be found at http://www.dol.gov/ebsa/COBRA.html. For convenience, we have also attached both the "election" model notice for participants terminating health coverage who are eligible for COBRA and the model language for SPD.
Cheiron health consultants can assist you with preparation of the notice to employees of the availability of the Exchanges.