DOL Updates COBRA Model Notices
Author: Michael Cardman, XpertHR Legal Editor
May 11, 2020
The US Department of Labor (DOL) has revised its model Consolidated Omnibus Budget Reconciliation Act (COBRA) notices to provide additional information about COBRA's interaction with Medicare.
Group health plans are required to provide employees and their spouses with a general notice that describes their COBRA rights. The general notice must be provided to participants within 90 days after they become covered under the plan. This general notice can be included in the plan's Summary Plan Description (SPD) as long as employees and their spouses are given the SPD within 90 days after becoming covered under the group health plan.
Group health plans also are required to give each qualified beneficiary a COBRA election notice within 14 days after receiving notice of a qualifying event. The COBRA election notice should describe the rights to continuation coverage and information on how to make an election. The notice must be written in a manner that can be understood by the average plan participant and must include certain information.
The updated model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA.
The agency also put out new Frequently Asked Questions about its COBRA model notices.
The DOL said it made the changes in response to a letter sent earlier this year by a bipartisan group of legislators in charge of the House committees with jurisdiction over health care, who said:
"For qualified beneficiaries who become Medicare-eligible but have yet to enroll in either Part A or Part B, group health plans can reevaluate any paid claims. Most often, individuals are not aware of their Medicare eligibility or the need to enroll in the program, even if one is still employed. As a result, many retirees are unexpectedly exposed to out-of-pocket liability for any costs paid under COBRA benefits on or after date of Medicare eligibility and penalties for late enrollment in Medicare. Some of this risk would be eliminated if COBRA notices addressed the interaction with Medicare, and vice versa. Unfortunately, such information is not required under either Medicare or COBRA, and thus, transparency and clear information about the interaction between the two is lacking."
"The information we're providing today will help Medicare-eligible Americans make key decisions regarding their healthcare coverage," said Labor Secretary Eugene Scalia. "As many individuals face economic hardship related to coronavirus, the Department will continue to inform workers and help them avoid incurring unnecessary health costs."
In a related development, last month the DOL extended certain time frames for continuation of group health plan coverage under COBRA.