COBRA CONUNDRUMS is reprinted from the March, 2014 issue of Health Insurance Underwriter Magazine featuring our very own Robert Meyers.
Under PPACA, the open enrollment period for 2014 Marketplace coverage ends on March 31, 2014. If your clients offer health benefits, this date is important because of its impact on COBRA coordination. This is the first of several articles in which I will outline how to coordinate COBRA administration with PPACA after open enrollment ends on March 31.
As you already know, the responsibility to provide COBRA continuation coverage did not end with health reform. In fact, thanks to PPACA, COBRA administration has become more important and more complex for a number of reasons – some of which we’ll cover here.
While employers do not have to be Marketplace experts, they certainly need to stay informed. Their employees and former employees will likely rely on them (and you as their broker) for answers as they evaluate their health insurance options during times of transition.
Benefit Availability is of Key Concern After April 1
Of course, employees will continue to change jobs and experience other benefit-eligibility triggering events between April 1 and the next Marketplace open enrollment period, which begins November 15, 2014. As you’ll see in the chart below, all of the qualifying events associated with COBRA are now also considered triggering life events under PPACA and cause special Marketplace enrollment to be available when they occur. And, under PPACA, there are several additional triggering events that do not apply to COBRA, shown in red.
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Events that Trigger COBRA-Eligibility |
Events that Trigger Special Enrollment ACA-Eligibility |
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Termination of Employment |
√ |
√ |
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Reduction in Hours |
√ |
√ |
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Marriage |
√ |
√ |
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Divorce |
√ |
√ |
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Births |
√ |
√ |
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New Employment |
√ |
√ |
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Loss of Dependent Status |
√ |
√ |
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Becoming Eligible for Medicare |
√ |
√ |
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Exhausting COBRA benefits |
√ |
√ |
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Loss of eligibility for Medicaid CHIP |
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√
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Income changes (For those already enrolled in the Marketplace) |
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√
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Change in immigration status |
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√
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Error by a government agency or navigator |
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√
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Move to a state outside one’s plan area |
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√
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(*Details in this chart may change as the ACA rollout evolves.)
Timelines and Notable Details
Note: Under PPACA, eligible individuals have 60 days to complete their special enrollment period and coincidentally, the COBRA election period also has 60 days. However, it is unclear if the calculation of the dates is identical, so for now let’s just note the similarity.
For the life events that trigger both COBRA and PPACA eligibility, individuals can choose between COBRA or Marketplace coverage. However, events that cause special enrollment in the Marketplace do not also allow them to access benefits outside the Marketplace.
The important thing for brokers to communicate to clients is that COBRA is ongoing and timely COBRA notices continue to be essential – even when individuals can also access coverage through the Marketplace.
Also, if qualified beneficiaries are actively participating in COBRA, they can only go to the Marketplace when their COBRA benefits are exhausted. If they simply stop paying COBRA premiums, they cannot access the Marketplace until the next open enrollment period.
It is also worth noting that active employees who have access to coverage through their employers can go to the Marketplace during open enrollment to shop for alternate benefit packages. However, it is unlikely they will be eligible for the subsidy because employer-sponsored coverage is available.
In Summary
The first open enrollment period is almost over and many politicians will breathe a temporary sigh of relief. Both sides will try to claim victory. Meanwhile, those of us who deal with this every day will be very, very, busy. By staying on top of the details and keeping your clients informed, you can help employers claim the victory of achieving compliance during a very complex and challenging time!
