Employee Benefits-Reminder: COBRA Election Notices Must Be Revised To Discuss Option To Purchase Health Coverage On An ACA Insurance Exchange

In Technical Release No. 2013-02 (the “Technical Release”), the Employee Benefits Security Administration (the “EBSA”) provided guidance on revising COBRA election notices to reflect the option to buy health insurance on an Affordable Care Act (“ACA”) Insurance Exchange. Here is what the EBSA said:

Background

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). Individuals with such a right are called qualified beneficiaries. A group health plan must 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 election notice is required to include a number of specific items, listed in the Technical Release.

The Revised COBRA Election Notice

Some qualified beneficiaries may want to consider and compare health coverage alternatives to COBRA continuation coverage that are available through the ACA Insurance Exchanges. Qualified beneficiaries may also be eligible for a premium tax credit (a tax credit to help pay for some or all of the cost of coverage in plans offered through the Insurance Exchange).

The Department of Labor 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. As with the earlier model, 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 Department of Labor to be good faith compliance with the election notice content requirements of COBRA.

The model election notice is available here, in modifiable, electronic form. A clean copy is available, as is a redline from the prior model notice to help interested stakeholders identify the changes.

Note: While the Technical Release does not so state, the revised COBRA election notice should probably be used on and after October 1, 2013. That is the date on which employers must provide employees with notices about the ACA Insurance Exchanges.