Updated Model COBRA and CHIPRA Notices

by King & Spalding

Since January 1, 2014, individuals and employees have been able to purchase medical health insurance coverage through federal and state exchanges (the “Exchanges”). Questions have remained, however, as to how health coverage offered by employers pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) interacts with the coverage options offered through the Exchanges. Recent guidance seeks to address these questions, revising the model COBRA notices to provide more detail about the coverage options under the Exchanges. Given the increased cost to employers of providing COBRA coverage, employers should take action to advise employees and their dependents of the availability and potential cost savings of transitioning to the Exchanges instead of COBRA.

Revised COBRA and CHIPRA Notices

The COBRA regulations require employers to provide two notices advising employees and beneficiaries of their COBRA rights. A general notice must be provided when the employee first becomes covered by an employer-sponsored health plan. A COBRA election notice must be provided to qualifying beneficiaries within 14 days after the plan administrator receives notice of a “qualifying event” such as termination of employment, birth or adoption of a child, marriage or divorce. The regulations specify content and provide a model for each notice. Use of the model notices is not mandatory. However, when appropriately completed by an employer, use of the model notices provides a “safe harbor” for compliance with the COBRA notice content requirements.

In May 2013, the U.S. Department of Labor (“DOL”) revised the model election notice to provide employees with information about Exchange coverage options (as we previously discussed here in June 2013). In its most recent guidance, the DOL further (and rather extensively) revised the model election notice and the general notice to include more detail about the Exchange coverage alternative.

The DOL also issued proposed COBRA regulations that change the way COBRA model notices will be updated in the future. Instead of amending its regulations to reflect changes to the model notices, the DOL will simply update the model notices on its website. This change will allow the DOL to update the notices more frequently and reduce any confusion as to where to obtain the most recent version of the model notice. The proposed regulations provide that appropriate use of the model notices will constitute good faith compliance with the notice content requirements until the regulations are finalized.

Substantial revisions were made to the election notice that focus on the interaction between COBRA and the Exchanges. Interestingly, none of the revised content is content required to be disclosed under the COBRA regulations. Notable revisions include:

  • Additional information about how to enroll in coverage offered on the Exchanges, what the Exchanges offer, and updated contact information to obtain additional information about the Exchanges.
  • Explanation of non-COBRA coverage options that may be more affordable, including enrolling in coverage on the Exchanges, Medicaid, or other group health plan coverage (such as a spouse’s plan).
  • Information regarding the how enrolling in COBRA impacts the ability to switch to coverage offered on the Exchanges.
  • Discussion of factors to be considered when choosing coverage following the loss of coverage under an employer sponsored health plan. Those factors include:
    • The cost of premiums;
    • Availability of current health care providers, prescription drug coverage, and service areas covered by the qualifying beneficiary’s new coverage network; and
    • Other cost-sharing factors such as copayments, deductibles or coinsurance.
  • The DOL urges individuals who receive severance packages that include employer-sponsored COBRA coverage to contact the DOL to discuss their options. While not discussed in the model notice, the expiration of employer-subsidized COBRA is not a “qualifying event” that would allow an individual a special enrollment period on the Exchanges outside an open enrollment period.1 Individuals whose employer-sponsored COBRA subsidy expires mid-year may have to wait until the next open enrollment period to obtain coverage through an Exchange or other group health plan.

The revised general notice has been modified to include information about an individual’s right to enroll in coverage offered on the Exchanges, as well as a disclaimer that such coverage may be more affordable than COBRA. Similar changes have been made to the required notice under the Children’s Health Insurance Program Reauthorization Act (“CHIPRA”).

Next Steps for Employers

Update COBRA general and election notices and CHIPRA notice

King & Spalding recommends that employers update their COBRA notices as soon as administratively possible to include information about the Exchanges, despite the fact that the COBRA regulations do not require employers to communicate the new information about the Exchanges. The benefit of updating employer notices by using the new model notices is two-fold: (1) Using the model notices provides a “safe harbor” for satisfying the notice content regulations and (2) Updating the notices provides an opportunity to advise individuals of the availability of other healthcare coverage options, which could provide a cost savings for employers and former employees alike.

Update other participant communications

King & Spalding also recommends that employers review and update other participant communications that may address healthcare coverage, including summary plan descriptions and enrollment materials to provide information on the Exchanges and other healthcare options.

King & Spalding is happy to assist employers in updating notices and participant communications.

1 The special enrollment rules for the Exchanges generally mirror the COBRA eligibility “qualifying event” provisions as discussed above. That is, if an individual experiences a qualifying event such as a termination of employment or marriage, the individual has 60 days to enroll in Exchange coverage. The Exchange enrollment rules also provide for a special enrollment right when COBRA has been exhausted. See 45 CFR 155.420(d)(1).

Authors, Eleanor Banister, Atlanta, +1 404 572 4930, ebanister@kslaw.com and Ryan Gorman, Atlanta, +1 404 572 4609, rgorman@kslaw.com.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.