Important HR Alert: New COBRA Notices Issued
The Consolidated Omnibus Budget Reconciliation Act, also known as COBRA, allows continued group health benefits to employees and their families provided by their group health plan for certain periods of time, under certain difficult circumstances.
These instances may include reduction in hours worked, job transitioning, job loss, deaths, divorces and other extenuating situations. According to the US Department of Labor, “qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.”
Additionally, COBRA outlines how workers and their families are able to choose continuation coverage as well as necessitating employers and health plans provide notice.
Recently, the Depart of Labor (DOL) has issued two proposed regulations updating the notices businesses are obligated to make available to workers and their qualified beneficiaries.
So what are the changes, you ask?
- Model General Notice: The first notice affected in this event is the general COBRA notice that is to be provided at the outset of new plans and to new employees. The new notice will alert employees and their spouses to the availability of health insurance through the Health Insurance Marketplace instead of choosing a COBRA continuation coverage. The notices will now need to explain that the Marketplace could possibly provide less expensive alternatives such as lower out-of-pocket expenses and premiums. The previously required information that was required regarding what events qualify for COBRA coverage as well as its cost is still applicable.
- Model Election Notice: The second notice affected is the election notice to be delivered to all eligible beneficiaries after a qualifying occurrence has happened. As is the case with the previously mentioned notice, the information regarding the COBRA continuation coverage is still contained within the proposal. However it now includes a large segment clarifying precisely what the Marketplace is, the 60-day election period to acquire health insurance through the Marketplace, how to make to switch after selecting COBRA, and that after a COBRA recipient depletes coverage they may enroll in the Marketplace. However, a qualified beneficiary may not switch back to COBRA once enrolled in the Marketplace.
When should you be using them?
The DOL has stated that while the protocols are not likely to be finalized until later in the year, employers should consider utilizing the sample notices contained within the proposed regulations, so as to ensure compliance with COBRA. We recommend that you immediately begin using these model notices in place of your current COBRA notices.
Where can you find them?
You can view the revised notices on the DOL’s website by clicking here.