The document discusses the relationship between COBRA and the Affordable Care Act (ACA). It notes that several key ACA provisions have been delayed, and examines how COBRA will interact with the ACA once it is fully implemented. It finds that the ACA, Department of Labor, and health insurance marketplaces all recognize the importance of COBRA. COBRA will continue to exist alongside the ACA and fill some gaps, such as providing continued coverage for standalone dental, vision, and prescription drug plans not offered on the marketplaces. The ACA did not eliminate or change COBRA rules, according to the Department of Labor.

1. COBRA & ACA:
Compatible or Irreconcilable?
Several key provisions of the ACA have now been delayed. When the ACA has fully achieved
lift off, what will become of COBRA?
COBRA will continue to fly, until and unless another law
permanently grounds it. Here are some observations around the
interplay between the ACA and COBRA:
THE ACA LIKES COBRA
Parts of the ACA looked to COBRA concepts
as the gold standard for calculations.
Case in point is W-2 reporting of health
care coverage in IRS Notice 2012-09. More
recently, the DOL thought COBRA was
important enough to
update the Model
Election Notice when it
released the Exchange
Notice. Click here for
our article.
THE DOL LIKES COBRA
Look at this DOL FAQ, which states that
the ACA “did not eliminate COBRA or
change the COBRA rules.” making it clear
that COBRA is not
going away. And take
a gander at this
lengthy 25-year
proclomation by the
DOL from 2011. (Click here)
THE MARKETPLACE LIKES
COBRA
To some extent, the Marketplace
coordinates with COBRA. For example, take
your most common reason for
termination of COBRA: premium
non-payment. If a qualified beneficiary
loses coverage because of non-payment,
this person is not entitled to a special
enrollment period for
Marketplace coverage
and must wait until
the annual enrollment
period.
COBRA FILLS SOME
ACA GAPS
Granted, the Health Insurance
Marketplace will provide COBRA qualified
beneficiaries with some alternatives for
medical coverage. In some cases, the
alternatives may be cheaper, but that is
not certain. Also, understand that
stand-alone dental, vision and
prescription drugs are
not required to be
offered in the
marketplace.
This is COBRA’s current status: a valid law. The ACA did not
change COBRA, as the DOL has pointed out.
copyright 2016