*By Patrick J. Hoban
Recently, the Department of Labor (“DOL”) released guidance, available here,
that changes employee notification requirements under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Employees
covered under a group health plan are entitled to notices regarding
their rights under COBRA. The new notice requirements include
information regarding the Health Insurance Marketplace (“Exchanges”)
under the Patient Protection and Affordable Care Act
The DOL has provided an updated model continuation coverage “general notice,” available here, and updated model continuation coverage “election notice,” available here.
Covered employees and covered spouses/dependents are entitled to the
general notice upon the commencement of their employment and the
election notice within a short time period following a “qualifying
event” (e.g., termination of employment). The DOL considers use of the
model notices “to be good faith compliance with the . . . notice
content requirements of COBRA,” at least until the DOL finalizes its
rules with respect to the notices
The new general notice
language informs employees of their potential eligibility for coverage
through the Exchanges or under another group health plan (e.g., a
spouse’s plan) through a “special enrollment period” as opposed to COBRA
continuation coverage.
The new election notice language sets forth in bold print “You may be able to get coverage through the Health Insurance Marketplace that costs less than COBRA continuation coverage”
and provides three pages of information relating to the Exchanges. In
addition to describing options other than COBRA continuation coverage,
the election notice advises that “it can be difficult or impossible to
switch to another” option once a decision is made
Additionally, the Department of Health and Human Services (“HHS”) released a bulletin, available here,
announcing a “special enrollment period” lasting through July 1, 2014
for qualified individuals to drop their COBRA coverage and enroll in a
plan under an Exchange. This “special enrollment period” only applies
to the federal Exchange and the HHS bulletin encourages state-based
Exchanges to adopt similar enrollment periods.
Employers and plan administrators should take note of the
model notices and remain alert as the notices are subject to change and
may be modified as the DOL finalizes its rules. For the time being,
use of the model notices constitutes good faith compliance with COBRA’s
notice requirements.
*Patrick J. Hoban practices in all areas of labor and employment law. For more
information about COBRA notices or any other labor and employment needs,
please contact Patrick pjh@zrlaw.com) at 216.696.4441.
