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New COBRA Enrollment Rights - Guidance for Individuals & Employers

Alltrust Insurance is breaking down the New Cobra Enrollment Rights to keep you informed and up-to-date.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires covered employers to provide former employees and dependents who lose group health benefits with an opportunity to continue group health insurance coverage. Individuals who are eligible for health coverage under COBRA are known as “qualified beneficiaries.”
The Affordable Care Act (ACA) made health insurance Exchanges available, beginning Jan. 1, 2014, for individuals and small businesses to purchase health coverage. The Exchanges are health insurance marketplaces where consumers can compare private health insurance options and purchase insurance.

Recently, the Department of Labor (DOL) and Health and Human Services (HHS) released several pieces of guidance regarding COBRA, which clarify the impact of the ACA’s Exchanges.

  • On May 2, 2014, the DOL released proposed regulations, which would amend the COBRA notice requirements to reflect changes made by the ACA.
  • At the same time, the DOL released updated versions of the model general notice and model election notice under COBRA, which reflect that the Exchanges are now open and which better describe special enrollment rights in Exchange coverage.
  • The DOL has also provided Frequently Asked Questions (FAQ) related to the proposed changes to model notices.
  • On April 21, 2014, HHS issued an FAQ clarifying the situations in which a COBRA qualified beneficiary may enroll in a qualified health plan (QHP) through an Exchange, and receive subsidies for that QHP coverage.
  • On May 2, 2014, HHS also issued a clarifying bulletin providing an Exchange special enrollment period for COBRA enrollees.

COBRA Notices

Under COBRA, group health plans must provide qualified beneficiaries with certain notices explaining their COBRA rights.

  • General Notice: A group health plan must provide qualified beneficiaries with a general notice of their COBRA rights. The general notice must be provided to qualified beneficiaries within 90 days after initial plan coverage begins.
  • Election Notice: In certain circumstances, a group health plan must also provide qualified beneficiaries with an election notice, which describes their rights to continuation coverage and how to make an election. The election notice must be provided to the qualified beneficiaries within 14 days after the plan administrator receives the notice of a qualifying event.

The DOL has provided model notices that plans may use to satisfy the COBRA notice requirements. The COBRA model election notice was previously revised on May 8, 2013, to inform qualified beneficiaries of other coverage options that would soon become available in the Exchanges.

For more detailed information on these guidelines, click here.

To speak to an Alltrust expert, call 727.772.4200 or click here.