What happens to COBRA now?

There has been alot of talk about what happens to COBRA, in light of the exchanges.  is it even necessary, if every employee can just go on the exchange and get coverage?  After all, there are no pre-existing conditions anymore!

Lets hit the pause button here  ||   there- that’s better.  lets consider the real world:

*  your employee on your corporate plan has health conditions, and the out of pocket on your plan is, say, $2000.  Almost all the plans on the exchange have Maximum out-of-pocket amounts of $4000-$6350.

*  Individual plans with Blue Cross in many states are only sold as individual plans – not family.  So an employee with a family of 4 goes from your plan (family out of pocket $4000) to four individual plans, and has a maximum out of pocket of more than $20,000.

*  In many states, Corporate plans may be much less expensive than exchange plans, in addition to having better coverage.

*  COBRA also covers Dental and other “healthcare” plans under certain circumstances

*-  Certificates of Creditable Coverage still must be issued, as many corporate plans do not have to comply with the new rules until the end of 2014.

*-  A great point recently was made by Robert Meyers in HIU.  While both the Marketplace election period and COBRA election period are 60 days – they start on different dates!  The Marketplace election starts on the event date, while COBRA begins the day the employer sends out the notice.  So imagine that your employee doesn’t do anything for 63 days after leaving employment, and than has a significant medical event – he cannot go on the marketplace, but he can still get COBRA!

COBRA is probably here to stay for a while, and notices are still required.