The Department of Labor (DOL) recently issued an FAQ addressing the inclusion of information about the Health Insurance Exchanges (Marketplace) in COBRA notices. The guidance could be very helpful for employers in directing former employees towards coverage on the Marketplace in lieu of COBRA.
Generally, a group health plan must provide qualified beneficiaries with a COBRA election notice that, among other things, describes their rights to COBRA continuation coverage and how to make a COBRA coverage election. The COBRA election notice must be written in a manner “calculated to be understood by the average plan participant.” The DOL has issued a model election notice designed to meet these requirements, and it does include some information on the Marketplace.
The use of the model notice is considered by the DOL to constitute good faith compliance with the election notice content requirements of COBRA. As such, employers ordinarily use the model notice and do not vary substantially from its terms. Many employers, however, want to provide additional information on the Marketplace, which may provide less expensive and more suitable coverage for former employees. Some employers provide this separately from the COBRA notice. The FAQ now indicates that certain additional information may be included in the COBRA notice.
The FAQ states that the COBRA election notice may include additional information about the Marketplace such as “how to obtain assistance with enrollment (including special enrollment), the availability of financial assistance, information about Marketplace websites and contact information, general information regarding particular products offered in the Marketplaces, and other information that may help qualified beneficiaries choose between COBRA and other coverage options.” The DOL cautions that the information must be “easily understood by the average plan participant” and therefore not too lengthy or difficult to understand.
Many employers work with third-party administrators that assist in providing COBRA notices. Those employers may want to check with their providers about adding language about the Marketplace to their COBRA notices. For those employers who provide the COBRA notices directly, they can modify the notices as provided in the FAQ.