EBSA Releases Updated Model COBRA Notices

The U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) has recently announced changes to specific notices required under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). Generally speaking, COBRA allows employees (and their families), who would otherwise lose their group health coverage due to certain life events, to continue their same group health coverage. These events include:

• termination or reduction in hours,
• death of a covered employee,
• divorce or legal separation,
• Medicare entitlement;
• and loss of dependent status.

Businesses that employed fewer than 20 employees on more than 50% of its typical business days in the previous calendar year are exempt from federal COBRA requirements, but may fall under “mini-COBRA” laws at the state level, which can vary significantly by state. Under the federal law, covered group health plans must provide covered employees and their families with certain notices explaining their COBRA rights. A group health plan must provide each covered employee and spouse (if any) with a written notice of COBRA rights “at the time of commencement of coverage” under the plan (known as the general notice). A group health plan must also provide qualified beneficiaries with a notice which describes their rights to COBRA continuation coverage and how to make an election (known as the election notice). On May 4^th, 2020, the EBSA issued a revised model general notice and a revised model election notice, both of which now provide additional information to address COBRA’s interaction with Medicare. The model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. It also highlights that if an individual is eligible for both COBRA and Medicare, electing COBRA coverage may impact enrollment into Medicare as well as certain out-of-pocket costs. Plan administrators can use the new model notices to meet requirements of notifying plan participants and beneficiaries of their rights under COBRA and qualified beneficiaries of their rights to elect COBRA coverage.