On May 2nd, the federal agencies responsible for the implementation of the Affordable Care Act jointly provided clarification and guidance in a number of key areas, some of which will be of special interest to plan sponsors and their participants, particularly COBRA participants and those who may experience a COBRA event in the future.


While the Marketplace open enrollment period ended on March 31, individuals may still enroll outside of open enrollment in certain qualifying situations, (much like with a group health plan), such as:
  • Marriage
  • Birth and adoption
  • Loss of other qualifying coverage, (for example through divorce, children reaching age 26, loss of eligibility for job-based coverage or exhausting COBRA)
When someone has one of these qualifying events, they have a 60 day Special Enrollment Period (SEP) to apply for coverage through the Marketplace. If they miss this 60 day window, they have to wait until the next annual open enrollment period unless they experience a subsequent qualifying event in the interim. Note that while exhausting COBRA eligibility is a qualifying event, voluntarily canceling COBRA coverage (or any coverage for that matter), is not. Health and Human Services (HHS) has determined that the COBRA Model Notice that had been in use did not make Marketplace options sufficiently clear to qualified COBRA beneficiaries, particularly that if they elected COBRA coverage they would only be able to apply for Marketplace coverage later during an open enrollment period or upon a qualifying event, and not if they voluntarily elected to discontinue their COBRA coverage.


In response to this HHS determination, the Department of Labor has updated their COBRA Model Election Notice to provide clearer language about the Marketplace options for someone who experiences a COBRA qualifying event and emphasizing cost considerations such as eligibility for tax credits and other cost-sharing reductions that could make Marketplace coverage a more affordable option than COBRA. Plan sponsors should begin using the new Model Notice as soon as is feasible.


In addition, because of the possibility that COBRA beneficiaries may not have fully understood the implications of enrolling in COBRA rather than Marketplace coverage, a one-time, limited SEP from May 1 to June 30 is being allowed for current COBRA participant to apply for coverage in federally facilitated exchanges. State exchanges have been encouraged to follow suit and CoveredCA has announced that their SEP for current COBRA participants will run from May 15 to July 15. More information about the SEP is available on CoveredCA's website here.


With the first Marketplace open enrollment period over, the agencies involved have been spending time doing a little house-keeping and addressing some important questions that hadn't been formally answered before coverage in the Marketplace become available or that made themselves apparent as the open enrollment period was underway. The complete CMS bulletin with their most recent guidance is available here.