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COBRA participants can opt for marketplace insurance

McAfee’s Brandon Long discusses more ACA changes for employers, including the option for former workers to choose between buying health insurance through COBRA or on the new health insurance marketplace. Current COBRA participants face a July 1 deadline to enroll in the latter.
by Paula Burkes Modified: June 11, 2014 at 9:00 am •  Published: June 10, 2014

Q&A with Brandon Long

Labor Department rule changes

coming for job health coverage

Q: The U.S. Department of Labor recently revised their model COBRA notices for employers. What changed?

A: Last month the DOL issued proposed rules with amendments to the notice requirements under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The proposed amendments are intended to align the COBRA notice requirements with the Affordable Care Act so that individuals who lose coverage under their employer’s plan and qualify for COBRA understand that they have the option to buy COBRA coverage or coverage through the new ACA Health Insurance Marketplace. The proposed rules were accompanied by a new model election notice and general notice that employers may use to satisfy their COBRA notice obligations. Employers likely will want to update their COBRA notices to incorporate the language in these new model notices.

Q: I understand that COBRA participants and beneficiaries have a one-time special window – which expires on July 1 – to enroll in coverage through the ACA marketplace. Should employers notify their COBRA-eligible persons of this deadline?

A: COBRA gives group health plan participants and beneficiaries the right to choose to continue their group health plan benefits for limited periods of time under certain circumstances, such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Now, because of the ACA, those same participants and beneficiaries also have the right to buy coverage through the ACA Marketplace, instead of COBRA. Last month, the Department of Health and Human Services (HHS) expressed concern that former model COBRA notices didn’t sufficiently address the ACA marketplace options (and the applicable enrollment deadlines) for persons eligible for COBRA and COBRA beneficiaries. Thus, HHS has provided an additional special enrollment period for such individuals, but it expires on July 1. Employers aren’t required to notify these individuals about this special enrollment opportunity, but they may want to, in order to try to reduce their COBRA costs. If employers are going to notify their COBRA-eligible persons and COBRA beneficiaries of this July 1 deadline, they should do so immediately.

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by Paula Burkes
A 1981 journalism graduate of Oklahoma State University, Paula Burkes has more than 30 years experience writing and editing award-winning material for newspapers and healthcare, educational and telecommunications institutions in Tulsa, Oklahoma...
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