In early May, a new bulletin about special enrollment was posted by the Centers for Medicare and Medicaid Services (a division of HHS, the U.S. Department of Health and Human Services). The news? Individuals who are eligible for COBRA now have until July 1 to choose a plan through the ACA Marketplace, if they want to.
The COBRA vs. Marketplace decision
COBRA makes it possible for COBRA-eligible individuals to keep the health plans they had through their employers after they’ve left their jobs. The main advantage of doing so is coverage continuity. COBRA participants don’t have to worry about starting over with new doctor networks or out-of-pocket expense thresholds. However, COBRA coverage can be expensive, as employers no longer share the costs for former employees.
COBRA-eligible individuals can also choose health care plans via the state and federal Marketplaces during a special 60-day enrollment window when employer-sponsored coverage ceases. Healthcare.gov defines Special Enrollment as "A time outside of the Open Enrollment period during which you and your family have a right to sign up for health coverage.” If you don’t have a special enrollment period, you can’t buy insurance through the Marketplace until the next open enrollment period.
The main advantage of going to a Marketplace is the potential for greater affordability. With tiered plan options, individuals can choose a leaner plan to control monthly costs. Depending on their income levels, they may also qualify for Marketplace subsidies.
Until recently, COBRA-eligible individuals didn’t understand their options
The problem is that COBRA-eligible individuals weren’t thoroughly informed about their choices. The sample notices published by the Department of Labor, and then distributed by employers, didn’t adequately cover employees’ options for finding a plan through the federal or state exchanges.
COBRA-eligible individuals didn’t realize that if they wanted to choose a Marketplace plan instead of COBRA, they had to act during a defined 60-day special enrollment window. As a result, some people missed their chance to enroll in Marketplace plans.
Special enrollment for those eligible for COBRA
To remedy this, HHS announced an extra two-month health insurance enrollment period for COBRA-eligible people. Affected individuals now have 60 days from the date of the bulletin, through July 1, 2014, to select QHPs in the Marketplace.
COBRA-eligible individuals who are interested should call Higginbotham at (855) 850-5433 to confirm eligibility and activate their special enrollment period. We’ve assembled a team of Marketplace specialists to provide quotes for individual and family coverage plans, help make the appreciate choices and assist with the application process.
What should employers do?
As a courtesy to former employees, employers may want to send a letter or email to current COBRA participants notifying them of this extra special enrollment window through July 1.
On an ongoing basis, employers should ensure that those who become eligible for COBRA understand they have two possible sources for coverage – COBRA or the Marketplace—and that there are strict timeframes for enrolling for each of them. If an employer uses a third party COBRA administrator, the administrator may already be alerting current COBRA participants on the employer’s behalf.
As always, you can count on Higginbotham for all of your group benefit services, including COBRA administration.