The Department of Labor (DOL) has issued proposed changes to COBRA regulations that remove incorporation of model notices in the regulations and refer to the authority of the DOL to issue and revise model COBRA notices from time to time, giving more flexibility to the DOL. New model notices explain the Affordable Care Act (ACA) marketplace as an alternative to COBRA coverage.
The model notices for both the general notice that is given when employees are first eligible for the group health plan and the election notice that is given when employees may elect COBRA coverage have been revised. The revisions are at the DOL website at:https://www.dol.gov/ebsa/cobra.html.
Principal changes include a section in the general notice that provides:
You may have other options available to you when you lose group health coverage. For example, you may be eligible to buy an individual plan through the Health Insurance Marketplace. By enrolling in coverage through the Marketplace, you may qualify for lower costs on your monthly premiums and lower out-of-pocket costs. Additionally, you may qualify for a 30-day special enrollment period for another group health plan for which you are eligible (such as a spouse’s plan), even if that plan generally doesn’t accept late enrollees.
Also, the election notice now includes:
Coverage through the Health Insurance Marketplace may cost less than COBRA continuation coverage. Being offered COBRA continuation coverage won’t limit your eligibility for coverage or for a tax credit through the Marketplace.
If you sign up for COBRA continuation coverage, you can switch to a Marketplace plan during a Marketplace open enrollment period. You can also end your COBRA continuation coverage early and switch to a Marketplace plan if you have another qualifying event such as marriage or birth of a child through something called a “special enrollment period.” But be careful though - if you terminate your COBRA continuation coverage early without another qualifying event, you’ll have to wait to enroll in Marketplace coverage until the next open enrollment period, and could end up without any health coverage in the interim.
Employers and their COBRA service providers should review their COBRA forms and make appropriate changes. The DOL proposed regulations say that use of these model notices, when appropriately completed, will be considered to be good faith compliance with COBRA notice requirements.