COBRA & ACA: Compatible or Irreconcilable?

Last Updated on May 21, 2020 by bigfish-admin

Several key provisions of the Affordable Care Act (ACA) have now been delayed. When the ACA has fully achieved lift off, what will become of Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The simple answer: COBRA will continue to fly, until and unless another law permanently grounds it Here are some observation around the interplay 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 Department of Labor (DOL) thought COBRA was important enough to update the Model Election Notice when it released the Exchange Notice.

The DOL likes COBRA

A recent DOL FAQ states that the ACA “did not eliminate COBRA or change COBRA rules.” making it clear that COBRA is not going away. And take a gander at this lengthy 25-year proclamation by the DOL from 2011.

COBRA fills come 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.

The Marketplace likes COBRA

To some extent, the marketplace coordinates with COBRA. For example, take the most common reason for termination of COBRA: premium non-payment. If a qualified beneficiary loses coverage of non-payment, this person generally not entitled to a special enrollment period for Marketplace coverage and must wait until the annual enrollment period.

This is COBRA’s current status: a valid law. The ACA did not change COBRA, as the DOL has pointed out.

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