On May 2, 2014, the Internal Revenue Service, Department of Health and Human Services, and Department of Labor (the “Departments”) collectively released the Affordable Care Act’s (ACA) nineteenth set of Frequently Asked Questions (FAQs). The FAQ addressed outstanding questions regarding Health Care Continuation Coverage (COBRA) and Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) releases, out-of-pocket maximums and limitations on cost-sharing, coverage of preventive services, FSA carryover and excepted benefits, and summary of benefits (SBA) requirements.

COBRA and CHIPRA

Following the Department of Labor’s (DOL) release of proposed COBRA regulations to better align COBRA with the ACA, the Departments issued FAQ guidance discussing COBRA’s general and election notice requirements, specifically when the notice is to be provided and the content of the notice. Although the proposed regulations eliminate the current model notice, although the FAQs state that the old version can still be used as good faith compliance with the notice requirement. (FAQ 1). Once the updated model notice is finalized it will be available on the DOL website. Additionally, the Departments noted that qualified beneficiaries may want to compare the price of COBRA coverage with coverage under the Health Insurance Marketplace (the Marketplace). The FAQs state that “[q]ualified beneficiaries may be eligible for a premium tax credit (a tax credit to help pay for some or all of the cost of coverage in plans offered through the Marketplace) and cost-sharing reductions (amounts that lower out-of-pocket costs for deductibles, coinsurance, and copayments), and may find that Marketplace coverage is more affordable than COBRA.”

The Department also clarified the CHIPRA notice requirement for group health plans located in a State that provides premium assistance. Under CHIPRA each employee must be provided notice of the potential opportunities for premium assistance in the State that the employee resides.Continue Reading COBRA, Cost-Sharing, and Other Matters Clarified in the Affordable Care Act’s Nineteenth Set of FAQs