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Massachusetts Division of Insurance Provides Special Enrollment Period for Loss of COBRA Coverage

by | Jun 5, 2023 |

By Dannae Delano, Barry Salkin and Roberta Casper Watson

As we have previously described in client alerts, the end of the National Emergency and the cessation of the outbreak period on July 10, 2023, will result in, among other things, the end of the tolling and extension of election and payment periods with respect to COBRA.  As a result, the rules that were in effect prior to the pandemic will continue to apply.  With respect to an initial qualifying event, an affected individual will have 60 days within which to make an election, and 45 days within which to remit their initial premium. Thereafter, premium payments must be remitted every 30 days.

In response to the anticipated ending of the outbreak period on July 10, 2023, the Massachusetts Division of Insurance, on April 10, 2023, issued Special Bulletin 2023-09 to, among others, commercial health insurers, to address the implications of the ending of the National Emergency with respect to COBRA.  The Division expressed concern that “loss of these COBRA flexibilities will…contribute to individuals experiencing loss of health insurance coverage and churn in the marketplace for individual and group health insurance.”  Therefore, “in the interest of facilitating a smooth transition back to non-emergency ‘normal’ commercial health insurance dynamics after three years of the Covid-19 pandemic,” with respect to any individual who experiences a loss of COBRA coverage, including losses due to voluntary termination or termination for non-payment, commercial health insurance carriers must consider such loss of COBRA coverage an event triggering special enrollment rights.  Upon the occurrence of such a triggering event, affected plan participants will have a period of 60 days either prior to or after the event to request the special enrollment period.  Carriers were further required to extend all special enrollment periods granted as the result of such a triggering event to November 2023 for coverage becoming effective in 2023.

This Bulletin does not apply to self-insured group health plans, and it is still too early to determine the extent to which regulators in other jurisdictions will take similar action.  As is generally the case with agency regulation at both the federal and state level, the regulation may be subject to judicial challenge. Employers with insured group health plans in Massachusetts will need to take care to ensure any pre-tax premium benefits are operated in accordance with the new Special Enrollment event and the appropriate plan documents, and that participants are properly notified of the new Special Enrollment right and how it will work with their benefits.