The Department of Labor (DOL), Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS), collectively known as “The Agency” issued one FAQ and a model COBRA Notice on June 21, 2016, and the Equal Employment Opportunity Commission (EEOC) provided a new Sample Notice required by the Americans with Disabilities Act (ADA) for wellness programs effective as of the first plan year beginning on or after January 1, 2017.
COBRA Notice
Generally, employers with 20 or more employees must offer COBRA for their group health plans. This entails providing written COBRA notices at the beginning of health insurance coverage explaining a participant’s COBRA rights and COBRA election notices upon eligibility for COBRA coverage.
In 2004 and again in 2013 the DOL issued requirements and model COBRA notices to assist employers with COBRA compliance. The 2013 model notices included the Affordable Care Act (ACA) and continuation coverage available from the Marketplace. Updated model notices issued May 2, 2014, reflect that coverage is now available in the Marketplace and provides information on special enrollment rights in the Marketplace.
This latest FAQ expands on additional information that may be included in the COBRA notice. This incorporates other information about the Marketplaces, such as:
- how to obtain assistance with enrollment, including special enrollment;
- the availability of financial assistance;
- information about Marketplace websites;
- contact information;
- general information regarding particular products offered in the Marketplaces; and
- other information that may help qualified beneficiaries choose between COBRA and other available coverage options.
COBRA election notices may be also tailored to particular groups such as young adults who age out of dependent coverage under their parents’ coverages. The Agency Guidance notes the language should be “easily understood by the average plan participant” and not too lengthy.
Using the DOL’s model COBRA Notice is not mandatory; however, employers may want to add suggested information to help qualified beneficiaries understand their rights and available options. There is no regulatory deadline for inserting this information into an employer’s COBRA notice.
ADA Notice
In separate guidance, new rules from the final ADA Wellness Regulations require employers who offer wellness programs that collect employee health information to provide a notice to employees informing them of:
- what information is collected,
- how it will be used,
- who will receive it, and
- what will be done to keep it confidential.
In issuing this final rule, the ADA sought to provide consistency with the Health Insurance Portability and Accountability Act (HIPAA) and the ACA rules on wellness program incentives. Also, the ADA wanted to ensure that participation in wellness programs was voluntary.
Unlike HIPAA and the ACA, the ADA places limits on disability-related inquiries and medical examinations related to wellness programs, regardless of how the information obtained is ultimately used.
The sample notice includes all ADA required information, including a sentence describing the wellness program as voluntary, the right not to participate, and a caveat regarding incentives. Also incorporated is a statement of privacy and security of personally identifiable health information. Although employers do not have to use the precise wording in the sample notice, they must convey the same meaning in their customized notices.
Notices are to be distributed prior to employees providing health information and with plenty of time for participants to decide whether or not to participate in the wellness program. Notices may be provided via email or hard copy and those with disabilities may require the notice in an alternate format.
Although employees’ signed authorizations are not required, (spouses’ written authorizations may be) best practice would be to obtain signed authorization from employees to comply with other requirements such as HIPAA and the Genetic Information Nondiscrimination Act (GINA).
We are fast approaching the New Year. Now is the time for employers to review all notice requirements to include the latest terminology to keep their notices compliant.
The information contained in this article is not intended to be legal, accounting, or other professional advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situations.
