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June 29, 2016

DOL: COBRA Notice May Include Additional Information about Health Insurance Exchange Coverage

An FAQ issued by Department of Labor’s Employee Benefit Security Administration (the “EBSA”), advises that administrators of group health plans may include information about “health insurance marketplace” (a/k/a  “Exchange”) coverage in, or along with, a COBRA election notice. The EBSA issued the new guidance jointly with IRS and Department of Health and Human Services.  FAQs about Affordable Care Act Implementation (Part 32).

The Affordable Care Act requires that the administrator of a group health plan (in many cases, the employer that sponsors the plan) provide information regarding enrollment in Exchange coverage (including the website and phone number of the relevant Exchange) to persons eligible to elect COBRA continuation coverage following a qualifying event. In Technical Release 2013-02, the DOL issued guidance relating to this requirement, including a link to a DOL’s website at which plan administrators could download a ACA compliant model COBRA notice (www.dol.gov/ebsa/modelelectionnotice.doc.).

The new FAQ clarifies that a plan administrator may include information about Exchange coverage in addition to the information contained in the DOL model notice. Specifically, the COBRA notice may include following information: how to obtain assistance with enrollment on the Exchange (including special enrollment); the availability of financial assistance through the Exchange; information about Exchange websites and contact information; general information regarding particular products offered on the Exchange; and other information that may help qualified beneficiaries choose between COBRA and other coverage options. The FAQ states that the EBSA encourages plan administrators to consider how they can help individuals maintain the coverage that would best suit their needs to tailor their COBRA notices accordingly. The FAQs permit plan administrators to tailor different notices to particular groups such as young adults aging out of dependent coverage on their parents’ health plan. The FAQ also cautions that, in all cases, the COBRA notice must be “easily understood by the average plan participant” and therefore, the information contained in the notice should not be too lengthy or difficult to understand.

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