Affordable Care Act Regulation Will Affect COBRA Notices
Suggested guidelines issued by the U.S. Department of Labor as a result of a provision in the Affordable Care Act—often called Obamacare—will change COBRA notice requirements. This means that members and their families will be notified of a choice they can make when they lose their healthcare benefits for any reason including the loss of employment. For this reason, this is a very important issue for all members to understand.
In short, the Department of Labor guidelines call for COBRA notices to state that COBRA qualifiers can choose coverage from the Health Insurance Marketplace that was set up by Obamacare. The best way to explain this change is to review the meaning of COBRA.
What is COBRA
As most members are well aware, COBRA is the program that provides covered employees and their families with the opportunity to have a temporary extension of their health coverage in many cases where coverage would otherwise end. COBRA is a self-paid continuation of coverage under the group health plan you enjoy as a Union member. It does not affect anyone's regular, employment-sponsored coverage. But COBRA does offer you the option of continuing your coverage if your employment-sponsored coverage ends.
If employer-sponsored coverage is ever lost (through layoff or the closing of a shop, as examples), the benefit of being able to purchase continued coverage through COBRA is that it can save money through group rates. Generally, these group rates are much, much lower than private insurers' rates for similar individual or family coverage.
Options Available
As a result of the recommendation made by the U.S. Department of Labor, the Benefits Fund office will notify members of options that are available for healthcare coverage through the Health Insurance Marketplace in addition to the COBRA notice. Members will be advised that they should compare the additional options for coverage that are available through the Health Insurance Marketplace with the COBRA continuation coverage that is available through the Benefits Fund office and choose the coverage that is best for them (and their families). Members will also be advised that they choose carefully between COBRA and other coverage options, because once their choice is made it can be difficult or, more likely, impossible to switch to another coverage option. As an example, if you choose a plan from the Health Insurance Marketplace you will not be allowed to later obtain COBRA from the Benefit Funds office.
Similar options now apply to members who retire after 55 years of age with 25 years of service and are younger than age 65. These members can obtain continuation coverage from the Benefit Funds office, but they will also now be notified of the option to choose a plan from the Health Insurance Marketplace. It is important to note, however, that if you choose not to purchase retiree continuation coverage through the Funds, you will be unable to assign your Medicare Part B to the Funds when you are 65 years old and thus will not be eligible to use the Health Centers, prescription drug program, etc.
What Is the Health Insurance Marketplace?
The Health Insurance Marketplace offers “one-stop shopping” to find and compare private health insurance options. In the Marketplace, consumers could be eligible for a new kind of tax credit that lowers their monthly premiums and cost-sharing reductions (amounts that lower their out-of-pocket costs for deductibles, coinsurance and copayments) right away, and can see what premiums, deductibles and out-of-pocket costs will be before making a decision to enroll. Through the Marketplace consumers also learn if they qualify for free or low-cost coverage from Medicaid or the Children’s Health Insurance Program (CHIP). Anyone can access the Marketplace at HealthCare.gov regardless of the state in which they reside. Information on the Health Insurance Marketplace is also available by phone at 1-800-318-2596.
Choose Carefully!
It is extremely important for members to understand that if they choose a plan from the Health Insurance Marketplace they will not be allowed to switch back to the Hotel Trades Council benefit plan unless they return to active employment. If you choose a healthcare provider from the Health Insurance Marketplace you will not receive any reimbursements from the Union or the Benefit Funds. Once you choose a provider from the Health Insurance Marketplace you are responsible for any premium payments and any medical co-payments required by that provider. You will not be able to use any of the Union’s Health Centers, dental offices or pharmacies because Marketplace insurance is not accepted within any of the Benefit Funds facilities.
When considering the choice between plans available at the Health Insurance Marketplace and the COBRA plan available through the Benefit Funds, it is important to remember this: Almost all plans available at the Health Insurance Marketplace come with co-pays for doctor visits, medical treatment, hospitalization and/or prescription drugs, in some cases large co-pays. That is not the case with the COBRA plan available through your membership in our Union. To further help any members who need to make a determination on coverage, a chart of COBRA rates is available in this issue of Hotel Voice. These rates are valid through the remainder of 2014.
Questions?
If you have questions about COBRA continuation coverage or the options that are available to you when you lose coverage for any reason, please call the COBRA Department at the Benefit Funds office. The phone number is 212-586-6400.
