The Department of Labor has issued a new proposed model notice of continuation coverage rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA). It’s similar to previous versions you may have used, but emphasizes that separated workers might be better off seeking health insurance from state or federal Health Insurance Marketplaces than purchasing COBRA coverage through your plan.
Although not yet required, it’s OK to begin using the model notice now. If you wouldn’t mind carrying fewer COBRA-insured former employees, it might be advantageous to mention coverage available through the exchanges. Don’t tout the exchanges; just provide the notice.
One downside for former employees: Possible coverage gaps. While COBRA coverage applies retroactively to the date of separation, policies purchased via the exchanges typically won’t kick in until the following month.
Download the proposed notice from the DOL's website.
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