On May 2, 2014, the Department of Labor (“DOL”) issued two new model notices related to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”). The notices include a model general notice and a model election notice that employers may use to meet the Affordable Care Act (“ACA”) requirement that they provide notice to employees about their coverage options on the Health Insurance Marketplaces (“Marketplace”). As a reminder, COBRA continuation coverage is available to eligible individuals who lose group health plan coverage due to certain qualifying events such as job loss, divorce, employee death, and cessation of dependent child status.
The new model notice includes information about purchasing individual coverage on the Marketplaces as an alternative to COBRA coverage. In addition, the model notices, which were already revised last year to include basic Marketplace information, now include more detailed information about Marketplace coverage, enrollment opportunities and restrictions, financial assistance, and factors to be considered in deciding between COBRA, Marketplace coverage, and any other alternatives.
On that same day, the DOL released proposed regulations related to the model notices. The proposed regulations explain that the new model notices will not be required until rulemaking is finalized and effective. Until that time, while not required, the DOL will consider use of the model notices to be good faith compliance with the notice content requirements of COBRA.
For more information about the new COBRA model notices, please contact your SGR Executive Compensation and Employee Benefits counsel.