Written by Robert Lowe
The US Department of Labor (DOL) has “stopped the clock” on many employee benefit plan deadlines during the period starting March 1, 2020 and ending 60 days after the end of the COVID-19 National Emergency (referred to by the DOL as the “Outbreak Period”), including the following:
- 60-day period for an employer to provide notice of the right to elect continuation of health coverage under COBRA
- 60-day period for a plan participant to elect continuation of health coverage under COBRA
- 45- or 30-day period for a plan participant to pay for COBRA coverage
- Applicable plan period for filing claims for benefits
- 180-day period for appealing denials of claims for benefits
- 30- or 60-day period for a plan participant to seek special enrollment when someone loses other plan coverage or adds a spouse or dependent
At the present time we don’t know when the National Emergency will end so we don’t know when the Outbreak Period will end. So, as of now, all of the deadlines referred to above are suspended.
There are many open issues under this guidance and this post provides only a brief summary of the guidance. However, it seems clear that participants who experience a COBRA qualifying event, such as a termination of employment or reduction in hours that would otherwise terminate coverage, will be able to elect COBRA coverage at any time up to 60 days after the end of the Outbreak Period.
If someone elects COBRA during the Outbreak Period or is already on COBRA during the Outbreak Period they may defer making COBRA premium payments until either 45 days or 30 days after the end of the Outbreak Period depending on when the initial election was made.
If the participant elects and pays for the coverage, the Plan must provide benefits retroactively for period for which coverage is elected and paid. This effectively allows plan participants to see if they incur claims that would make election of COBRA desirable and then elect and pay for the coverage retroactively.
Also, any period for making benefit claims and appeals that would otherwise start during the Outbreak Period does not begin to run until the end of the Outbreak Period. For example, if a claim is denied today, the 180-day period for filing an appeal would not begin running until the end of the Outbreak Period. If the claim was denied less than 180 days before March 1, 2020, the period for appealing the denial is suspended during the Outbreak Period.
The DOL also announced that plan sponsors will have relaxed deadlines for providing notices and disclosures that otherwise would have to be provided during the Outbreak Period, if “the plan and responsible fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances. Good faith acts include use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages, and continuous access websites.”
This provision will give plan sponsors additional flexibility if they are unable to satisfy a deadline to provide a required document such as a benefit statement, a Summary Plan Description or Summary of Material Modifications if plan terms are changed. It also allows for greater use of electronic distribution of required documents than is otherwise permissible under existing regulations.