Practice Areas

ObamaCare FAQ of the Month: What Effect Will ObamaCare Have on COBRA?

February 2014

By: Peter E. Hansen, Esq.

The short answer: Not much. Even after the Employer Shared Responsibility Mandate becomes effective in 2015, COBRA will continue to require employers to offer employees and their dependents the option to continue to receive employer-provided group health care coverage following a "qualifying event," such as an employee's termination or reduction in hours. The duration of coverage will be the same (generally 18 months); the type of coverage will be the same (identical to coverage available to current employees); the premium cost to employees will be the same (generally 102% of the cost of coverage); and the notice and distribution requirements will continue.

There is one notable exception - the revised COBRA model election notices. Employers (or their third party administrators) must continue to distribute a notice explaining COBRA continuation rights within 14 days of receiving notice of a qualifying event, but the revised notices contain information regarding the purchase of coverage through state health exchanges. In this respect, the revised notices may be beneficial to employers given that coverage purchased through the exchanges will likely be cheaper for employees than COBRA coverage. Of course, each situation is different, but employers who do not currently distribute the revised notice (available at should begin doing so ASAP.

Questions? Suggestion for a future ObamaCare FAQ of the Month? Please contact WS Attorney Peter E. Hansen at (262) 560-9696, or email [email protected] .