cobra-240x203Last week, the federal Department of Labor issued proposed regulations dealing with COBRA notices. The regulatory proposal is quite uninteresting: Basically, the administration is removing the model notices from the Code of Federal Regulations and providing them instead on the Department of Labor’s website. This allows the notices to be changed much more quickly and easily, without resort to the federal rulemaking process.

The Labor Department also posted the new model versions of these notices: The general notice employees receive when they sign-up for employer-provided healthcare, and the election notice employees receive when a qualifying event occurs and they have to actually decide whether or not to continue their health insurance through COBRA. (You can find links to both new versions at the DOL’s COBRA Continuation Coverage page.)

The changes to the notices mostly involve Obamacare: specifically, the interface between Obamacare and COBRA. The notices explain that employees (and other beneficiaries) who are losing their employer-provided coverage may continue that coverage for at least 18 months by paying the full premium, pursuant to COBRA. However, employees also have the option of foregoing COBRA coverage and instead buying insurance through the Health Insurance Marketplace.

Ordinarily, anyone who wants to buy insurance on the Marketplace must wait for an open enrollment period. One just closed; the next one doesn’t start until mid-November. So what if you get laid off between now and then? The new notices explain that there is a 60-day “special enrollment” period triggered by losing job-based coverage. In other words, a laid-off employee has 60 days to choose a new health plan through the Marketplace; the same 60-day period applies to choosing COBRA coverage.

The new election notice provides some good answers to questions about switching coverage, too:

  • If you choose COBRA coverage, but decide you want to buy through the Marketplace instead, you may do so during the initial 60-day special enrollment period. If you miss this deadline, you’ll have to wait until open enrollment rolls around, just like everyone else (unless you have a second event that triggers a special enrollment period, like having a child).
  • If you choose Marketplace coverage, but decide you should have taken advantage of COBRA, you are out of luck. Once you decline COBRA coverage, it’s gone.
  • Once your COBRA coverage ends, you get another 60-day special enrollment period in which to sign up for Obamacare.