On May 1, 2020, the Department of Labor (DOL) released new COBRA model notices that, while not containing any new requirements, offer a clearer explanation of the intersection of COBRA and Medicare. This topic can cause confusion for those at a time in their life where employment, possible retirement and Medicare eligibility converge.
Third-party administrators (TPAs) and employers should carefully review their General (Initial Rights) Notice and Election Notice and update them where needed. Although not required to use the exact model notices issued by the DOL, TPAs and employers must include all the information from them in their own versions. Failure to clearly explain an individual’s rights under COBRA can create significant consequences.
The first new model notice covers the timing of enrollment in Medicare. Medicare-eligible people who delay enrollment in favor of electing COBRA could face a penalty – and, when they do eventually enroll in Medicare, will lose their COBRA coverage. Those who enroll in Medicare first and later elect COBRA will not lose Medicare coverage. Therefore, those eligible for both should enroll in Medicare first.
The second new model notice explains the order of claims payor. For those who enroll in both COBRA and Medicare, Medicare will generally pay first (primary payer) and COBRA second. You can find more detailed FAQs here.
The DOL updates model notices periodically as regulations change. The last update included the required language around alternative Marketplace coverage. All other COBRA notices, required or optional, are left to the discretion of the entity issuing the notices. Penalties can apply if notices are not complete.