Work in the Time of COVID-19: FAQs for Employers

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Notice 2021-01 recently issued by the Employee Benefits Security Administration, provides helpful clarification on relief from certain participant deadlines issued last year.  However, it also provides “suggestions” that plan administrators should consider following to avoid potential liability.

In last year’s Notice 2020-01 issued in April 2020, EBSA announced that plans must disregard the coronavirus “Outbreak Period” when calculating the following plan deadlines:

The Outbreak Period begins March 1, 2020 and runs until sixty (60) days after the announced end of the National Emergency. The end of the COVID-19 National Emergency has not been announced.  However, the authority under which this relief was issued limits any extension of deadlines to one year.

The new guidance clarifies that these deadlines will be extended by disregarding the period beginning on the date the person was first eligible for relief (which was as early as March 1, 2020) and ending on the date that is the earlier of:

Thus, any relief that began on March 1, 2020, will end on February 28, 2021, triggering the time period for filing any claims or appeals to again run beginning March 1, 2021.  The chart below provides some examples of how the one-year statutory limit impacts benefit plan deadlines.

However, perhaps more importantly than the deadline guidance, Notice 2021-01 notes that plan fiduciaries must make “reasonable accommodations” to minimize the possibility of individuals losing benefits/rights because of a failure to comply with deadlines.  Specific actions the Notice says a fiduciary “should consider” doing, include:

  1. Sending a notice regarding the end of the relief period when the administrator/fiduciary knows, or should reasonably know, that an individual will be impacted by the end of the relief period.
  2. Reviewing any claims procedures notices sent prior to or during the National Emergency period for any failure in the disclosures to provide accurate timeframes/deadlines to participants and beneficiaries on when they were required to take action.

While these are not phrased in the notice as mandates, fiduciaries should strongly consider taking these actions to minimize any claims by participants or government investigators.  If these particular steps are not practical for the plan, the administrator should document that fact and investigate implementing whatever other “reasonable accommodations” it can to address the impending end of the relief period for affected participants.

HIPAA Special Enrollment Timeframes

Event

Deadline Example of Extension
Loss of Coverage: Employee or dependent loses coverage in another plan (including Medicaid and CHIP) Within 30 days of event, participant must request enrollment; or

Within 60 days, in the case of the special enrollment rights added by the Children’s Health Insurance Program Reauthorization Act of 2009

Toni loses eligibility to participate under her spouse’s health plan because coverage under that plan ends on March 31, 2020.  The one-year statutory limitation on the extension ends on March 30, 2021, and therefore the deadline for Toni to request enrollment is April 30, 2021 (the one-year period from the date she was first eligible for relief is disregarded and the 30-day deadline again runs beginning March 31, 2021).
New dependent of eligible employee due to birth, marriage, adoption or placement for adoption Within 30 days of event, participant must request enrollment Toni gives birth on February 15, 2020.  She would like to enroll her child in the health care plan. The one-year statutory limitation on the extension ends on February 28, 2021, and therefore the deadline for Toni to request enrollment is March 17, 2021 (14 days before she was eligible for relief, disregarding the 1-year period from March 1, 2020 to February 28, 2021, then 16 days beginning March 1, 2021).

 

COBRA Timeframes
Event Deadline Example of Extension
Electing COBRA Coverage:  When qualifying beneficiary loses coverage under the group health plan At least 60 days to elect COBRA continuation coverage Toni experiences a qualifying event due to a reduction of hours because of COVID-19 on March 17, 2020. The one-year statutory limitation on the extension ends on March 16, 2021, and therefore the deadline for Toni to elect COBRA coverage is May 16, 2021 (she was immediately eligible for relief on March 17, 2020; the one-year period from the date she was first eligible for relief is disregarded and the 60-day deadline runs beginning March 17, 2021).
Payment of COBRA premiums Monthly installments, due no sooner than 30 days after the first day of the period for which payment is being made.

Cannot require payment of premiums before 45 days after the day of initial COBRA election

Toni began receiving COBRA coverage on January 1, 2020. Premium payments are due monthly, on the first of each month with a 30-day grace period for making payments. Toni paid for her January and February coverage but stopped making payments beginning on March 1, 2020. The one-year statutory limitation on the extension of payment for March 1, 2020, ends on February 28, 2021.  Therefore, the deadline for Toni to pay premiums in full for March 2020 is March 31, 2021 (30 days after any expiration of the relief).
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