As described in a prior blog post, last spring the Department of Labor and the Department of the Treasury (Agencies) issued COVID-19 pandemic relief that extended numerous deadlines under ERISA and the Internal Revenue Code (Code) applicable to group health plans, retirement plans, and other ERISA benefit plans, as well as participants in those plans (Extension Relief). Specifically, the Extension Relief stated that, subject to a one-year statutory limitation imposed by ERISA Section 518 and Code Section 7508A, all deadlines for benefit plan actions identified in the Extension Relief (Deadlines) would be put on hold for the period beginning March 1, 2021 and ending 60 days after the announced end of the COVID-19 National Emergency (Outbreak Period). President Biden extended the National Emergency on February 24, 2021 and the end date is, at this time, unknown.
Participant Deadlines covered by the Extension Relief include those applicable to:
- Requests for HIPAA special enrollment in a group health plan.
- Notice of COBRA qualifying events and Social Security disability determinations for COBRA purposes.
- COBRA elections and COBRA premium payments.
- Benefit claim requests and appeals of adverse benefit determinations.
- Medical plan external review requests and filing information to perfect a request for external review.
Plan and plan fiduciary Deadlines covered by the Extension Relief include those applicable to:
- COBRA election notices.
- All notices, disclosures, and other documents required to be provided under Title I of ERISA, as long as the responsible plan fiduciary acts in good faith and furnishes the notice, disclosure, or document as soon as administratively practicable under the circumstances.
In the run up to the one-year anniversary of the start of the Outbreak Period (i.e., February 28, 2021), there has been a lot of uncertainty about how plans should interpret the one-year statutory limitation that applies to the Extension Relief. To resolve the uncertainty, the Agencies issued joint guidance on February 26, 2021 in EBSA Disaster Relief Notice 2021- 01 (Extension Notice) confirming that the one-year statutory limitation applies to the Relief on a case-by-case basis.
This means the Deadlines will be disregarded until the earlier of (a) one year from the date the individual or plan was eligible for the Extension Relief, or (b) the last day of the Outbreak Period. On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Extension Relief will resume. In no case will a disregarded period exceed one year.
The Extension Notice includes the following examples:
- If a qualified beneficiary would have been required, absent the Extension Relief, to make a COBRA election by March 1, 2020, the COBRA election deadline is delayed until February 28, 2021.
- If a qualified beneficiary would have been required, absent the Extension Relief, to make a COBRA election by March 1, 2021, the COBRA election deadline is delayed until the earlier of (a) one year from the deadline without the Extension Relief (March 1, 2022) or (b) the end of the Outbreak Period (which may or may not be ongoing on March 1, 2022).
- If a plan would have been required, absent the Extension Relief, to furnish a notice or disclosure by March 1, 2020, that notice or disclosure should be furnished on or before March 1, 2021.
The Extension Notice reminds plan fiduciaries to make reasonable accommodations to prevent the loss or delay of benefits due to the pandemic in circumstances when the Extension Relief is no longer available, and to take steps to minimize the possibility of the loss of benefits due to a failure to comply with plan time frames. With these guiding principles in mind, plan fiduciaries may want to consider:
- Sending a notice regarding the end of the Extension Relief period, where the plan administrator or other responsible plan fiduciary knows, or should reasonably know, that the end of Extension Relief period is exposing a participant or beneficiary to a risk of losing protections, benefits, or rights under the plan.
- Reissuing or amending previously issued plan disclosures (e.g., COBRA election notices and claims procedure notices), if such disclosures failed to provide accurate information regarding the time in which participants and beneficiaries were required to take action.
- Ensuring that participants and beneficiaries who are losing coverage under their group health plans are aware of other coverage options such as through the Health Insurance Marketplace (which is offering a special enrollment period from February 15 to May 15, 2021).
The Extension Notice also includes an acknowledgement that there may be instances when full and timely compliance with ERISA’s disclosure and claims processing requirements by plans and service providers may not be possible, including during periods of pandemic or natural disaster-related disruption, and indicates that in situations where fiduciaries have acted in good faith and with reasonable diligence under the circumstances, “enforcement will be marked by an emphasis on compliance assistance and includes grace periods and other relief.”
As with the initial Extension Relief, the implications of the Extension Notice are significant and will impact numerous aspects of plan administration.