Model COBRA Election Notice in light of the ACA

On May 8, 2013, the U.S. Department of Labor (DOL) issued Technical Release 2013-02, which provided guidance and an updated model election notice for group health plans for purposes of the continuation coverage provisions under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) as required to comply with the Affordable Care Act (“ACA”), which kicks in January 1, 2014.

The model COBRA election notice was revised to include additional information regarding health coverage alternatives offered through the Marketplace. Open enrolment for health coverage through Marketplace began on October 1, 2013.

In general, under COBRA, an individual who was covered by a group health plan on the day before a qualifying event occurred may be able to elect COBRA continuation coverage upon a qualifying event (such as termination of employment or reduction in hours that causes loss of coverage under the plan).

The DOL has a model election notice that plans may use to satisfy the requirement to provide the election notice under COBRA. This notice is being revised to help make qualified beneficiaries aware of other coverage options available in the Marketplace. In order to use this model election notice properly, the plan administrator must complete it by filling in the blanks with the appropriate plan information. Use of the model election notice, appropriately completed, will be considered by the DOL to be good faith compliance with the election notice content requirements of COBRA.

The revised COBRA election notice informs qualified beneficiaries of their options as follows:

“There may be other coverage options for you and your family. When key parts of the health care law take effect, you’ll be able to buy coverage through the Health Insurance Marketplace. In the Marketplace, you could be eligible for a new kind of tax credit that lowers your monthly premiums right away, and you can see what your premium, deductibles, and out-of-pocket costs will be before you make a decision to enroll. Being eligible for COBRA does not limit your eligibility for coverage for a tax credit through the Marketplace. Additionally, you may qualify for a special enrollment opportunity with another group health plan for which you are eligible (such as a spouse’s plan), even if the plan generally does not accept late enrollees, if you request enrollment within 30 days.”

It is important for employers and employees to be up to date on those issues since beginning on January 1, 2014, individuals and employees of small businesses will have access to coverage through the Health Insurance Marketplace.

If you believe your rights as an employee may have been breached, please contact The Harman Firm, LLP.