Along with other recent changes, including the delay of COBRA deadlines and premium payments (see our Client Alert: Major Extension of Employee Benefit Plan Deadlines Due to COVID-19 Outbreak), the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) released new model notices that employers may use to comply with the notice obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). A News Release as well as frequently asked questions (FAQs) were also posted.
- News Release
- COBRA Model Notice FAQs
- COBRA Model General Notice
- COBRA Model General Notice (Spanish)
- COBRA Model Election Notice
- COBRA Model Election Notice (Spanish)
These revised general and election model notices provide additional information regarding the interaction between COBRA and Medicare. While no legal changes are referenced, a new paragraph explains to employees that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA.
Along with a few other small revisions, the model notices insert a new section addressing whether an individual can enroll in Medicare instead of COBRA, the timeframe for doing so, and the potential penalties for waiting to enroll in Medicare Part B. The new section also describes the priority of payment if both COBRA and Medicare are elected.
Employers should ensure their COBRA notices are updated to include these revisions.
Notably, these new notices do not address the extension of time to elect COBRA or to pay for COBRA during the coronavirus Outbreak Period. (See our Client Alert: Major Extension of Employee Benefit Plan Deadlines Due to COVID-19 Outbreak). Employers are not required to provide COBRA election notices during the Outbreak Period, and individuals are not required to elect or pay for COBRA during the Outbreak Period. Separately, in its recent FAQs (accompanying the Joint Notice that extends COBRA deadlines, among others), the EBSA reminds individuals that if employer coverage is lost, Marketplace coverage is another alternative, and it may be more affordable than COBRA. The FAQs review the Marketplace’s special enrollment periods (which have not been extended).
Issues regarding communication of all these changes will emerge quickly.
Important Note: While the Department of Labor considers use of these model notices by employers to be good faith compliance, it is important to remember that participant and qualified beneficiary litigation may still ensue. These model notices do not address numerous other important circumstances, such as limited application of COBRA continuation for most underspent health FSAs. Additionally, it is recommended that the general notices contain information on how an individual must provide notice of a qualifying event (such as whether oral notice or electronic notice will be accepted) and what information must accompany the notice of qualifying event.
With all the continual changes, it is important to be in contact with your employee benefits advisors and counsel. Please check with your Fraser Trebilcock attorney for the most recent updates.
This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.
We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.
Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.