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Aug02

Notice for Terminating Medical Coverage

An employer with employees who have fallen below the 130 hrs per month threshold needs/wants to remove them from the group medical plan. How much notice must be given to the employees before they can be removed from the plan? And, to confirm, this would then qualify them for either COBRA or SEP in a marketplace plan, correct? For which they have 60 days to choose continuation of coverage or individual coverage, correct? Thank you!

In most cases, an employer must provide at least 30 days notice prior to the termination of healthcare coverage. Additional notice may be required under state law.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20 or more employees that provide group health plan coverage to offer continuation of coverage due to qualifying events. Qualifying events include termination or reduction in hours of employment of the covered employee. COBRA requires that employers provide employees and their qualified beneficiaries with an Election Notice within 14 days after the qualifying event that results in loss of coverage of the right to continue their medical coverage. There is much information that should be included in the Election Notice. The DOL provides a sample Election Notice on their website.

Under COBRA, employees and their qualified beneficiaries must be given at least 60 days to decide whether to elect continuation coverage.

Employees with certain qualifying events are eligible for a Special Enrollment Period (SEP) with a marketplace plan. Qualifying events for a SEP include a reduction in work hours that causes an individual to lose their job-based healthcare plan.

Just to note, providing COBRA compliant notices is critical. Not only must notices include certain information, documenting the method and timeliness of delivery of such notices is equally important.

This entry was posted on Tuesday, August 2nd, 2016 at 8:28 pm and is filed under
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