Updated COBRA Notices and Proposed Guidance Issued


NEW YORK—The Department of Labor (DOL) on May 2, 2014, released a new model general notice form and model election notice form for providing Consolidated Omnibus Budget Reconciliation Act (COBRA) notices to employees, and a related notice of proposed rulemaking on the COBRA notice requirements, published in the May 7 edition of the Federal Register.

Federal agencies also released an updated model notice regarding premium assistance under Medicaid and the Children’s Health Insurance Program (CHIP).

Employees 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 updated notices make it clear to employees 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 Department of Health and Human Services (HHS) and Department of Treasury, also published Frequently Asked Questions (FAQs) related to the proposed changes to model notices.
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).

Hedley Lawson, Contributing Editor
Managing Partner
Aligned Growth Partners, LLC