Agencies Release New COBRA and CHIPRA Guidance and Model Notices

Department of Labor (DOL) and Health and Human Services (HHS) recently released several pieces of guidance regarding COBRA, which clarify the impact of the ACA’s Exchanges.  Including:

  • Proposed Regulations which would amend the COBRA notice requirements to reflect changes made by the ACA.
  • Updated  COBRA model General notice and Election noticewhich reflect that the Exchanges are now open and which better describe special enrollment rights in Exchange coverage.
  • If a person voluntarily drops coverage outside of Marketplace open enrollment (their COBRA has not yet expired), they would not qualify for a special enrollment period.  Although during the next open enrollment period or when their COBRA expires, they could enroll in a Marketplace plan and may be eligible for Advanced Premium Tax Credit (APTC).¹
  • HHS also issued a clarifying bulletin providing an Exchange special enrollment period for COBRA enrollees.

Updated COBRA Notices

General notice: A group health plan must provide qualified beneficiaries with a general notice of their COBRA rights. The general notice must be provided to qualified beneficiaries within 90 days after initial plan coverage begins.  These notices can be included with a group’s new hire/open enrollment packet or handled through a COBRA administrator.

Election notice: In certain circumstances, a group health plan must also 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.  These notices are normally provided through a COBRA administrator.

Updated CHIPRA Notice

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) permits states to offer eligible low-income children and their families a premium assistance subsidy to help pay for employer-sponsored group health coverage. Under CHIPRA, if an employer’s group health plan covers residents in a state that provides a premium subsidy, the employer must send an annual notice about the available assistance to all employees residing in that state (the Employer CHIP Notice).  The DOL has issued a CHIPRA model notice that employers can use to comply with CHIPRA. On May 2, 2014, the DOL revised this model notice to include similar updates related to Exchange coverage. These notices can be included with a group’s new hire/open enrollment packet.

 

¹April 21, 2014, HHS issued an FAQ clarifying the situations in which a COBRA qualified beneficiary may enroll in a qualified health plan (QHP) through an Exchange and receive subsidies for that QHP coverage.

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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.