On May 2, 2014, the Departments of Labor (DOL) and Health and Human Services (HHS) issued guidance regarding how the Consolidated Omnibus Budget Reconciliation Act (COBRA) is affected by ACA’s Exchanges. The DOL and HHS issued updated model notices and FAQs, and announced an additional Exchange special enrollment period to help further clarify how ACA’s Exchanges affect COBRA.
The DOL issued an updated model general notice and model election notice for COBRA. The updated notices reflect when ACA’s Exchanges are open and describe special enrollment rights for Exchange coverage. While employers are not required to use the DOL’s model COBRA notices, use of the notices will be considered to be good faith compliance with COBRA’s notice content requirements.
HHS issued an FAQ clarifying when a COBRA qualified beneficiary may enroll in a qualified health plan (QHP) through an Exchange and receive a subsidy for that coverage. Individuals may enroll in Exchanges only during an annual open enrollment or a special enrollment period (SEP). When initially eligible for COBRA coverage, an individual would qualify for that SEP in the Exchange. After an individual has elected COBRA, he or she can switch to a plan through the Exchange only during an annual open enrollment period or after COBRA coverage is exhausted.
HHS was concerned that COBRA qualified beneficiaries may not have understood their Exchange enrollment rights, so they created an additional SEP which allowed COBRA beneficiaries to enroll in QHPs through the federally-facilitated Exchange (FFE) until July 1, 2014.
HIPAA Certificates of Coverage No Longer Necessary
The Affordable Care Act’s (ACA) elimination of pre-existing condition exclusions for plan years beginning on or after January 1, 2014, makes HIPAA Certificates of Creditable Coverage unnecessary. Group health plans are not required to provide HIPAA Certificates as of 2015 and beyond.
Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), plans and issuers had to provide HIPAA Certificates to individuals when they lost coverage under the plan or upon request for 24 months after coverage was terminated. The HIPAA Certificate established prior creditable coverage to reduce/eliminate pre-existing condition exclusions.