Companies who employ 20 or more workers are currently required to offer COBRA benefits to eligible employees when they terminate their employment. While managing these benefits is already somewhat of a hassle, the Affordable Care Act has implemented some important changes that employers need to be aware of.
First of all, while employees still have 60 days to elect to participate in the COBRA benefits, they’re no longer retroactive. Any claims occurring prior to their enrollment would not be covered.
Secondly, the rules have changed for when employees can enroll in the alternative coverage that’s available through their state or federal health insurance exchange. Instead of 60 days from the receipt of the notice to elect participation in COBRA benefits, they can enroll within 60 days from a qualifying event (e.g. loss of coverage). They can also wait til open enrollment which is November 15th – February 15th.
Finally, individuals need to carefully consider accepting free COBRA from their former employer. While losing their coverage due to termination is a qualifying event, voluntarily canceling it in order to switch to another plan is not.
For more explanation on these and other issues affecting COBRA benefits, you can read the full article from TLNT here.