The Affordable Care Act’s first open-enrollment period ended in April 2014, but some laid-off workers still have the ability to secure Obamacare coverage via a new resolution by the Department of Health and Human Services. This extension could confirm to be a betterment for some businesses.
In a disclosure issued in May 2014, Health and Human Services extended the enrollment period for people who have health coverage through COBRA—the Consolidated Omnibus Budget Reconciliation Act. The Department elongated the Obamacare enrollment period to July 1 because it deemed notifications about COBRA choices were unclear to those enrolled in the program.
Purchasing coverage through Obamacare could save individuals with COBRA coverage thousands of dollars each year. Under COBRA, individuals who have been laid off or had work hours decreased can maintain the medical insurance they had through their employer. However, they are responsible to pay the full cost of that coverage, including the company share, plus a 2 percent administrative fee.
By engaging in Obamacare, individuals and families have the opportunity to purchase coverage that, depending on their income, could be minimized by hundreds of dollars per month to become more affordable for them.
Jobs, Not Obamacare, Are Helping the Uninsured:
Potential Insurance Savings. Employers who have members in COBRA are generally negatively impacted on medical-insurance renewals and overall ability to get competitive rates in the marketplace because departed employees who stay on COBRA are generally those who could not get coverage due to a pre-existing health condition. In the turmoil of Obamacare, many of those same people feared a conversion in their coverage could mean disappearance of coverage, and so they remained on COBRA. This special enrollment extension allows employers to educate their former employees on the benefits of changing coverage, and in the process, remove these higher claims from their insurance risk pool.
Compliance. COBRA participants carry some of the highest compliance requirements of all benefits. Reducing the number of participants dependent on the company to provide convenient and systematic benefits updates can reduce the workload on the company and increase efficiency.
Employers can reduce their COBRA exposure with a precise and well-executed outreach strategy. By educating COBRA participants on the extension and explaining how Obamacare can potentially save them money, employers can work to reduce their COBRA exposure. Business owners should consider working with a knowledgeable insurance broker skilled in communicating insurance details to employees. An insurance professional will know best how to communicate to former employees and will save business owners from potential misperception and falsification.
