ARRA, CHIPRA Create Employer Notice Headaches

COBRA support firms will handle the changes for employers that use COBRA firms, but employers that handle COBRA themselves will have to look out for model notices and other guidance coming from the U.S. Labor Department, the U.S. Treasury Department, and the U.S. Department of Health and Human Services in the coming weeks, Corporate Synergies says.

“For employers, the new COBRA subsidy law will increase the administrative and communication costs for all plan sponsors and will raise the costs of group health coverage for those employers who involuntarily terminated employees between Sept. 1, 2008, and Dec. 31, 2009,” according to Tom Lerche, a health care practice leader in the consulting arm at Aon Corp., Chicago.

The size of the cost increase will depend on the number of employees who were let go and the COBRA costs for that particular employer, Lerche says.

In addition, employers and employees should research all options and stay open to the possibility that, for some employees, buying individual health insurance still may be a better option for some laid-off employees, Lerche says.

CHIPRA also will affect employers, especially in states that subsidize parents’ purchase of group coverage for their children, according to Larry Grudzien, a benefits lawyer.

In addition to letting

The new law also requires employer-provided group health plans and insurers to permit employees and their dependents that are eligible for coverage but not enrolled in coverage but not enrolled under the plan to enroll if they become ineligible for coverage under Medicaid or a SCHIP.

Besides these new additional special enrollment rights, the law provides new notice and disclosure obligations for employers that maintain group