COBRA, ERISA, and Other Plan Deadlines: Guidance on COVID-19 Extensions

On February 26, 2021, the U.S. Department of Labor (DOL) issued EBSA Disaster Relief Notice 2021-01, which clarifies group health plan deadlines—under COBRA, HIPAA, and ERISA—that were extended due to the COVID-19 pandemic.

March 02, 2021

On February 26, 2021, the U.S. Department of Labor (DOL) issued EBSA Disaster Relief Notice 2021-01, which clarifies group health plan deadlines—under COBRA, HIPAA, and ERISA—that were extended due to the COVID-19 pandemic. We discuss below the most significant guidance for employers.

How Do the Extended Deadlines Work?

In the spring of 2020, the DOL and Department of the Treasury (Agencies), in response to the COVID-19 pandemic, issued a notice and rule extending certain group health plan deadlines. These extensions applied to:

  • The deadline to elect COBRA coverage;
  • The deadline to pay COBRA premiums;
  • The deadline for group health plans to provide COBRA election notices;
  • The deadline to elect a HIPAA special enrollment; and
  • Deadlines to file claims, appeals, and requests for external review under ERISA.

Many benefits practitioners interpreted the guidance as extending these deadlines no further than February 28, 2021. However, Notice 2021-01 clarifies that these extensions end on the earlier of (1) one year from the date a participant is first eligible for deadline relief or (2) 60 days after the end of the National Emergency, which is currently ongoing. This means that many participants will still have over 1 year to make elections, and deadlines will vary with individual participants’ circumstances.

For example:

Previously, a participant would have 60 days to elect COBRA coverage after a qualifying event such as a termination resulting in loss of coverage. However, under the new guidance, if the participant experienced a COBRA qualifying event on 3/1/2021, the COBRA election period would not start until 1 year later, or 3/1/2022. The participant would therefore have until 4/30/2022 (60 days) to elect COBRA coverage. If the National Emergency were to end on 6/1/2021, the participant would then have until 7/31/2021 (60 days) to elect COBRA coverage.


What Else Should Employers Consider?

The Agencies also noted that group health plans should:

  • Make reasonable accommodations to prevent the loss of or undue delay in payment of benefits;
  • Take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames;
  • Consider sending a notice when a participant approaches the end of a relief period;
  • Consider reissuing or amending prior plan disclosures (such as COBRA and claims procedure notices) if they did not provide accurate information about deadlines; and
  • Consider ways to ensure that participants who are losing employer-sponsored coverage are aware of other coverage options (such as the February 15 - May 15 Exchange special enrollment period) when they lose coverage.

While all of the above steps are not mandatory, we recommend that employers at least consider adopting notices or plan amendments documenting their plans’ reasonable accommodations and accurate disclosures of plan deadlines.

Effective Date

This notice interprets existing law and regulations and therefore is effective immediately. We recommend that employers discuss with their third-party administrators and other vendors how their plans will comply with the above requirements and recommendations.

What's Next?

We will provide a more detailed discussion of this and other new COVID-19 guidance in our next regulatory and compliance webinar on March 18, 2021 at 12:00PM ET. Members can register here.

We expect that in the coming weeks and months, agencies will continue to issue guidance related to COVID-19, the workplace, and employer-sponsored health coverage. We will keep our members updated of any new guidance.

Resources

If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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