DOL Issues Guidance on Employee Benefits-Related Extensions
The Department of Labor has issued guidance addressing the duration of the “outbreak period” extensions for certain benefits-related deadlines in response to the COVID-19 pandemic.
In April 2020, the Departments of Labor, Health and Human Services, and Treasury jointly issued guidance extending certain deadlines and timeframes under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code for the duration of the national emergency related to the COVID-19 pandemic, and until sixty (60) days after the announced end of the pandemic (termed the “outbreak period”). The extensions were effective March 1, 2020, and affected the 30-day period to request HIPAA special enrollment, the 60-day period to elect COBRA continuation coverage, the date for making COBRA premium payments, the date on which individuals must notify employers of a COBRA qualifying event, and the timeframes applicable to ERISA claims procedures.
When the guidance was originally issued in April 2020, it would have been hard for anyone to believe the “outbreak period” could have lasted for more than a year. But statutory limitations under ERISA impose a one-year maximum on the “outbreak period.” As a result, the “outbreak period” was statutorily set to end February 28, 2021, thereby starting the clocks for each extended deadline (e.g., the 60-day period to elect COBRA continuation coverage would have begun February 28, 2021).
At the last hour, on February 26, 2021, the DOL issued new guidance addressing the duration of the “outbreak period.” While the new guidance comes as a relief to plan administrators, the one-year maximum under ERISA still applies – now on an individual basis. In other words, affected individuals will qualify for the extensions until the earlier of: (1) one year from the date they were first eligible for the relief, or (2) the end of the “outbreak period.” For example, if a qualified beneficiary would have been required to make a COBRA election by May 31, 2020, then the deadline for making that election is now the earlier of May 30, 2021, or the end of the “outbreak period” (if such “outbreak period” should end before May 31).
These individual-specific compliance deadlines will require plan administrators to closely track individuals’ claims and election periods beginning March 1, 2020, and through the end of the “outbreak period.” Additionally, plan administrators should consider notifying affected individuals of the new rules related to the deadline extensions.