The ongoing COVID-19 pandemic is causing unprecedented challenges for businesses and workers. In response, the Departments of Labor (DOL) and Treasury have announced a new Final Rule extending certain timeframes for employee benefit plans, including extending the usual deadlines for COBRA elections and payments. In some cases, employees who lose their group health coverage due to layoff or reduced work hours are then struggling to meet election deadlines for other coverage options. In other cases, persons with group health or disability coverage are wrestling with meeting plan deadlines for filing claims or appealing claim denials.
The new Final Rule addresses these concerns and others by requiring plans to extend specific deadlines. Here is how it works:
The declared COVID-19 National Emergency began March 1, 2020. From that date until 60 days after the end of the national emergency (yet to be announced) is deemed the “Outbreak Period.” The new DOL rule requires plans to disregard the Outbreak Period in applying certain plan deadlines.
For instance, assume the national emergency were declared to end April 30, 2020, making the hypothetical last day of the Outbreak Period June 29. In that case, an employee who lost group health coverage due to a COBRA qualifying event on March 31 would have until August 28 (60 days after June 29) to elect COBRA and then even longer to make the initial COBRA premium payment. If elected and paid, the COBRA coverage would take effect retroactively on April 1.
According to the new rule, plans must disregard the entire Outbreak Period in applying the following timeframes:
- HIPAA: The 30-day period (or 60-day period if CHIP) to request special enrollment in a group medical plan due to losing other coverage or acquiring a new dependent.
- COBRA: The 60-day election period; 60-day period for beneficiary to notify the plan of a qualifying event or Social Security determination of disability; 45-day grace period for initial premium payment; and 30-day grace period (or longer) for subsequent premium payments.
- Group health and disability plans: The plan’s timeframes for filing claims, appealing claim decisions, and requesting external reviews.
The DOL provides several examples of how the Outbreak Period is disregarded in counting the plan’s timeframes or deadlines. The examples assume the national emergency ends April 30, but that is merely for illustration since the actual end date has not been declared. The DOL also notes that the national emergency may be declared to end on different dates for different areas of the country. Although this will make benefit plan administration even more complicated, the intent of the new rule is clear: this is an unprecedented time and those whose group benefits are directly affected must be given lengthy timeframes to make decisions.
The rule applies to ERISA plans (plans sponsored by private-sector employers) which are regulated by the DOL. Separately, the Department of Health and Human Services (HHS) is encouraging non-ERISA plans sponsored by governmental employers to extend deadlines in a similar manner. HHS may consider issuing similar regulations.
For more information see “Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak” (85 FR 26351, May 4, 2020)