Coordination of COBRA and Enrollment in Exchange Coverage

Posted by BAS - 08 May, 2014

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The Department of Labor issued guidance intended to coordinate continuation of coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) with qualified health coverage offered through the Health Care Exchanges.  The guidance is scheduled to be published in the Federal Register today.

COBRA provides certain individuals (referred to as “qualified beneficiaries”) the opportunity to continue their group health plan coverage for a limited period of time, upon the occurrence of certain life events.  COBRA qualified beneficiaries must pay for their COBRA continuation coverage, but the coverage is offered at group rates.  An Initial Rights Notice is required to be distributed to all new plan participants and their families.  Upon a COBRA qualifying event, qualified beneficiaries must receive a Qualifying Event Notice describing the opportunity to elect COBRA continuation coverage.  Benefit Allocation System’s affiliate, Cobra Control Services, LLC (“CCS”), assists employers with meeting their COBRA notice distribution obligations.

The Department of Labor issued changes to the required COBRA notices intended to inform COBRA qualified beneficiaries that they may purchase health coverage through the health care reform Marketplace, or “Exchange,” and Exchange coverage may cost less than COBRA continuation coverage.  The new language also describes the availability of a special period to enroll in Exchange coverage both when a COBRA qualified beneficiary is initially eligible for COBRA, and when a qualified beneficiary’s COBRA coverage is exhausted.

The government also announced an additional 60-day limited period (now through July 1, 2014) during which time existing COBRA participants and COBRA eligible individuals may enroll in coverage offered through the Exchange.

BAS and CCS are updating all COBRA notices to incorporate the new language addressing Exchange coverage.  While the government did not provide a date by which the new language should be included in the COBRA correspondences, BAS intends to have the modifications incorporated into all COBRA notices in the next few weeks.  If you would like information about BAS’ COBRA services or have any other questions, please contact your account manager or info@cobracontrol.com.


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