Mirroring a recent HHS initiative, some state-run marketplaces such as Covered California have extended a special enrollment period for COBRA-eligible individuals, allowing them to enroll in a marketplace exchange plan through July.
While workers and their families who are eligible for employer-sponsored coverage generally must be informed of their right to COBRA continuation coverage at the start of employment, as well as their right to purchase COBRA coverage when separated from a job, both HHS and many of the state marketplaces have proposed changing their notifications to offer information on options available through both the insurance marketplace as well as the more traditional COBRA programs.
In many cases, workers eligible for COBRA continuation coverage can save significant sums of money by instead purchasing health insurance through the marketplace, says assistant secretary of labor for employee benefits security Phyllis C. Borzi. COBRA continues to play an important role in helping workers and families maintain coverage after a job loss, and it is important that workers know that in some cases there is a Marketplace option as well.
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Through San Francisco-based Benefitters new platform in partnership with Covered California, benefits departments and insurance brokers will send personalized notices to employees, explaining their options in plain English as well as the deadline to enroll in a new plan through the marketplace or COBRA.
Some employers currently will automatically pay for and enroll laid-off workers in a COBRA policy, for a set time period, such as 90 days, says Jonathan Pearlstein, manager of sales and business operations at Benefitter.Others are providing more education, guidance and enrollment support to help laid-off workers find a plan on the Obamacare exchanges.
Many even question COBRAs relevance since the roll out of the insurance marketplaces, as cheaper options for unemployed or recently separated employees become more available.
The only advantage of COBRA is that it allows an employee to stay with their previous, employer-provided health plan, Pearlstein says. The main reason a recently laid-off worker might prefer this vs. an exchange plan is if they are in the midst of an episode of care [e.g. cancer treatment], and they don't want to potentially change their provider network within that care episode.
COBRA will likely stick around its utility will just diminish as workers are redirected to plans on the exchange instead, he adds.
Echoing his thoughts, Amy Bergner, managing director in the health care practice at PricewaterhouseCoopers Human Resource Services, thinks there are other considerations people will take into account when figuring out whether COBRA makes sense versus the marketplace such as the network, doctors, hospitals or particular drugs not covered on the marketplace.
There are some states with very few offerings on the marketplace and the options may not match well, she says. I think gradually, as the marketplaces gain more traction and we see more plans offered through them, and assuming that the premiums for the marketplace coverage are less expensive or offering comparable offerings to COBRA yeah, we probably agree COBRA will be eroded, but I think its going to take some time to get there.
While not opining one way or another on COBRAs future, Department of Labor spokeswoman Laura McGinnis says the important thing is that [individuals] know they have options so they can choose what works best for them.
Although state-run markets like Rhode Island and California have extended their enrollment period, a spokeswoman for the Centers for Medicare and Medicaid Services advises individuals to check in with the states marketplace directly.
