Did you know that your COBRA notice has to tell employees that they might be able to get cheaper health care coverage through the Health Insurance Marketplace under the Patient Protection and Affordable Care Act aka Obamacare?
Last May, the Department of Labor revised its model COBRA election notice to include the following language:
“There may be other coverage options for you and your family. When key parts of the health care law take effect, you’ll be able to buy coverage through the Health Insurance Marketplace. In the Marketplace, you could be eligible for a new kind of tax credit that lowers your monthly premiums right away, and you can see what your premium, deductibles, and out-of-pocket costs will be before you make a decision to enroll.”
What the proposed notice does not tell employees is that if an employee elects COBRA coverage, the employee cannot change their mind and replace their COBRA coverage with cheaper insurance through the Marketplace until the COBRA coverage is exhausted, or until next open enrollment period (which begins in November 2014). At time of the qualifying event, an employee can decline COBRA coverage and apply for a Marketplace health plan (because the qualifying event triggers a special enrollment opportunity), but once COBRA is elected, if the employee wants health insurance, they must continue to pay for COBRA coverage until the next open enrollment period.