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Feds temporarily expand COBRA escape option

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The Obama administration is giving workers who have lost group health coverage an option many mistakenly thought they already had.

The U.S. Department of Health and Human Services has created a 60-day special enrollment period for anyone who has COBRA group health benefits continuation coverage.

The Center for Consumer Information & Insurance Oversight, the HHS agency in charge of implementing Patient Protection and Affordable Care Act commercial health insurance market provisions, announced the “SEP” for holders of COBRA coverage Friday in a bulletin.

The SEP started Friday and is set to end July 1.

The bulletin affects consumers using the federal exchanges run by HHS. It has no direct effect on residents of states with state-based exchanges.

HHS earlier put out regulations that let holders of employer-sponsored group health coverage sign up for individual coverage through the public exchanges during a 60-day period after the loss of group coverage.

HHS also let the people who paid for COBRA continuation coverage sign up for insurance through the public exchanges during a 60-day period after the COBRA coverage runs out.

But consumers eligible for COBRA coverage can keep it in force for up to 18 months.

Between the end of the PPACA individual coverage open enrollment period and Friday, consumers who had had COBRA in force for more than 60 days and wanted to trade it in for ordinary individual health insurance had no automatic way to do so.

COBRA holders in that position would have had to come up with some other reason to apply for a special enrollment period. Otherwise, the COBRA holders who wanted regular individual coverage would have had to wait until their COBRA benefits ran out, or until Nov. 15 — the proposed start date of the next open enrollment period.

HHS is providing the new special enrollment period because it worries that earlier COBRA model notices did not describe the enrollment period limits facing COBRA coverage holders clearly enough, CCIIO officials write in the new bulletin.

COBRA holders who want to trade their coverage in for exchange plans now, during the new special enrollment period provided by the bulletin, should call the HHS exchange call center at (800) 318-2596, officials say.

In the same bulletin, officials also are providing a hardship exemption for some consumers who might otherwise have to pay the new PPACA “shared responsibility” penalty to be imposed on taxpayers who fail to buy what PPACA and HHS define as “minimum essential coverage.”

The hardship exemption will help taxpayers who bought PPACA-compliant coverage outside the exchange system from April 1 through May 1.

HHS is offering the penalty exemption for those people because it created a similar exemption for people who bought plans through the HHS-run exchanges after March 31. The department fears that some taxpayers may have thought the exemption applied to taxpayers who bought any PPACA-compliant coverage, not just exchange plans, officials say in the new bulletin.

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