How COVID-Related Deadline Extensions Affect Your Employee Benefits Plan
Prior guidance from the Department of Labor (DOL) and the Internal Revenue Service (IRS) suspended certain employee benefit plan deadlines until 60 days after the expiration of the national emergency (or “Outbreak Period”). This extension allowed for more time to:
- Elect Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage, make premium payments, notify the plan of a COBRA qualifying event or disability determination, and provide election notices;
- Request special enrollment under Health Insurance Portability and Accountability Act (HIPAA) guidelines; and
- File a benefit claim or appeal under a plan’s claims and appeals procedures, file a request for an external review, or file information to perfect an incomplete request for external review.
However, the agencies’ authority to suspend such deadlines during a national emergency is limited by statute to one year. With the COVID-19 Outbreak Period still ongoing, uncertainty arose about how plans should administer the deadline extensions after the one-year anniversary of the pandemic passed.
To address this uncertainty, the Department of Labor released EBSA Disaster Relief Notice 2021-011 on February 26, 2021.
New Guidance: Individualized Participant-By-Participant Determinations Now Required
Under the new guidance, plans must apply the one-year maximum extension on an individual-by-individual basis. Specifically, deadlines that fall within the Outbreak Period are extended and must be disregarded until the earlier of (1) one year from the date the plan or individual was first eligible for Outbreak Period relief, or (2) the end of the Outbreak Period, at which point the previous timeframes resume.
This means that the maximum amount of time that can be disregarded for calculating any individual deadline will not exceed one year.
- A qualified beneficiary’s deadline to elect COBRA was on March 1, 2020. The qualified beneficiary’s election deadline was extended until February 28, 2021 (exactly one year).
- A qualified beneficiary’s deadline to elect COBRA was on March 1, 2021. The qualified beneficiary now has until March 1, 2022 or the end of the Outbreak Period, whichever occurs earlier, to elect COBRA.
Extended Deadlines Mandatory for Private Employers; Optional for Government Plans
Under guidance released by the Centers for Medicare & Medicaid Services on May 14, 20202 , the extended timeframes are not mandatory for non-federal governmental plans, although sponsors of non-federal governmental plans are encouraged to provide relief to participants and beneficiaries similar to that specified in the COVID-19 Relief Rule.
This blog is up to date as of April 2021 and has not been updated for changes in the law, administration or current events.