ACA, Health Insurance Exchanges And The Future Of COBRA

Law360, New York (June 18, 2014, 10:15 PM EDT) -- For nearly 30 years, Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 has required employers that employ 20 or more employees to offer continuation health coverage under their group health plans upon certain qualifying events, including termination of employment, reduction in hours, a dependent's loss of eligibility, divorce or legal separation or death of the qualifying employee. Although the Affordable Care Act did not repeal or otherwise alter COBRA, many speculate that COBRA may become less relevant as individuals may now forgo COBRA in lieu of alternative coverage that is available in the health insurance marketplaces. Two recent government announcements aid employers' ability to steer COBRA-eligible individuals to the insurance marketplaces, thereby decreasing COBRA liability under their group health plans. This article reviews these announcements, discusses the future role of COBRA and explores proactive ways that employers might encourage COBRA-eligible individuals to elect marketplace coverage....

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