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COBRA Election Notices May Include Additional Information About ACA Health Exchanges
Practical Law Legal Update w-002-6940 (Approx. 4 pages)
COBRA Election Notices May Include Additional Information About ACA Health Exchanges
by Practical Law Employee Benefits & Executive Compensation
| Published on 21 Jun 2016 • USA (National/Federal) |
The Departments of Labor (DOL), Health and Human Services (HHS), and Treasury issued FAQ guidance indicating that additional information about the Affordable Care Act (ACA) health insurance exchanges may be provided in election notices under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
On June 21, 2016, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (Departments) issued FAQ guidance addressing the content of COBRA election notices. Specifically, the FAQ indicates that election notices may include information about the ACA health insurance exchanges in addition to enrollment information about the exchanges that was reflected in the DOL's updated model COBRA election notice (see Legal Update, DOL COBRA Election Notice Substantially Revised, Practice Note, COBRA Election Notice, and Article, Health Insurance Exchange and Related Requirements Under the ACA).
Under COBRA, most employers that sponsor group health plans must provide covered employees and their covered spouses and dependents who lose coverage because of certain qualifying events the opportunity to pay to continue coverage under the employer's plan (see Practice Note, COBRA Overview). Individuals must be provided with an election notice that describes their rights to continuation coverage under the plan and how to make an election. The DOL has issued a model COBRA election notice for this purpose, which the government updated to address information on coverage options under the ACA's health exchanges (see Legal Update, DOL Issues Model Exchange Notices, Updated COBRA Election Notice and Related Guidance).
According to the Departments' FAQ, plans may include information about the ACA exchanges in addition to the exchange-related information that is currently reflected in the model COBRA election notice. This information may include:
- How individuals can obtain assistance with exchange enrollment (including special enrollment).
- The availability of financial assistance.
- Information about exchange websites and contact information.
- Information about particular products offered in the exchanges.
- Information that may help COBRA qualified beneficiaries choose between COBRA and other coverage options.
COBRA election notices also may be tailored to particular groups, for example, young adults who age out of dependent coverage on their parents' health plan (see Practice Note, Coverage for Adult Children to Age 26 Under the ACA).
The FAQ includes reminders that:
- Election notices should be easily understandable by the average plan participant.
- Any additional information should not be too lengthy.
Guidance Does Not Address the Health Coverage Tax Credit
The new FAQ does not announce updates to the DOL's model COBRA notice to reflect the reinstated health coverage tax credit (HCTC), and the DOL's model notice does not appear to have been updated in that regard (see Legal Update, Recent Legislation Impacts COBRA, HSAs, Expatriate Plans, ACA Reporting Penalties and the Employer Mandate: Reinstated Health Coverage Tax Credit May Impact COBRA Election Notices).
For additional resources regarding COBRA and the health insurance exchanges, see the COBRA Toolkit and Health Insurance Exchanges Toolkit.