The U.S. Department of Labor updated its model COBRA notices to provide recipients more information about the interaction of COBRA and Medicare. All employers should make sure their COBRA communications include the new language suggested by the DOL. Failure to provide proper COBRA communications can lead to hefty fines.
The notices provide detailed information on the interaction of COBRA and Medicare coverage. Specifically, the notices now explain the timing of electing Medicare and its impact on COBRA coverage and which coverage pays first if a continuant is enrolled in both Medicare and COBRA. The DOL also released the following frequently asked questions.
Q.- I didn’t enroll in Medicare when I first became eligible because I was still employed, but I recently lost my job. Can I enroll in Medicare now after my group health plan coverage ends?
A.- Yes, and there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. In general, if you don’t enroll in Medicare Part A or B when you are first eligible because you are still employed, after the Medicare initial enrollment period, you have an 8-month special enrollment period3 to sign up for Medicare Part A or B, beginning on the earlier of
- The month after your employment ends; or
- The month after group health plan coverage based on current employment ends.
If you don’t enroll in Medicare and elect COBRA continuation coverage instead, you may have to pay a Part B late enrollment penalty and you may have a gap in coverage if you decide you want Part B later. If you elect COBRA continuation coverage and later enroll in Medicare Part A or B before the COBRA continuation coverage ends, the Plan may terminate your continuation coverage. However, if Medicare Part A or B is effective on or before the date of the COBRA election, COBRA coverage may not be discontinued on account of Medicare entitlement, even if you enroll in the other part of Medicare after the date of the election of COBRA coverage.
Q.- What health coverage pays first if I’m enrolled in both Medicare and COBRA?
A.- If you are enrolled in both COBRA continuation coverage and Medicare, Medicare will generally pay first (primary payer) and COBRA continuation coverage will pay second. Certain plans may pay as if secondary to Medicare, even if you are not enrolled in Medicare.
BAS’ Cobra Control Services is using revised notices in compliance with DOL guidelines provide information about Medicare and COBRA. For details about CCS’ easy COBRA administration, contact your account manager or solutions@BASusa.com.