COBRA Updates Include Marketplace Options

COBRA Updates Include Marketplace Options








The United States DOL (Department of Labor) released some new/revised notices at the end of last week. These include:

These new notices will be published in tomorrow’s Federal Register (May 7, 2014). These updated COBRA notices are designed to drive home the point that we’ve all been discussing since PPACA became law—namely that, for many (former-plan participants) choosing to purchase a plan through the Health Insurance Marketplace (that’s what the government run exchanges are called) will often be cheaper, and may even offer greater options than continuing coverage via COBRA.

Why not just end COBRA?

Well, we all know that these Marketplace-based coverages are not without their flaws and problems, and there are considerations like networks, continuity of care, or even that you’ve already met your deductible and do not wish to “start over” on a new plan to consider. However, at some point in the future (maybe even within the next two years) we could see Congressional action to repeal COBRA if the Marketplaces were viable and accessible for all.

Frequently Asked Questions

The DOL, HHS and Treasury also published FAQs related to the proposed changes to model notices. The FAQs are also posted on the DOL website and on the HHS website. HHS also posted their version of a Special Enrollment Period for the Marketplace (for people that are already enrolled in COBRA and for other COBRA QBs (Qualified Beneficiaries).

While it is true that you are not required to use the Model Notices, however, Plans that do use them are presumed to meet the COBRA notice requirements.  Prior notices didn’t elaborate about all the options, including seeking Marketplace coverage (instead of COBRA), so the Special Enrollment Period was created.  Thus HHS established a Special Enrollment Period, allowing COBRA QBs in states covered by the federally facilitated Marketplace until July 1, 2014 to drop COBRA coverage and enroll through the Exchange by calling the Marketplace call center.

The DOL,HHS andTreasury also encourage state-rune health insurance Exchanges to provide similar notices and Enrollment periods for COBRA QBs.