Last year, the Internal Revenue Service (IRS) and the Department of Labor (DOL) jointly offered extensions and other relief to employee benefit plan administrators who might be struggling to meet various filing, notice, disclosure, and amendment deadlines during the COVID-19 outbreak. Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2020-01 and the Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak (collectively, the “2020 Notices”) paused the deadlines for ERISA notice and disclosure requirements, claims procedures, COBRA elections, and special enrollment elections until 60 days after the announced end of the COVID-19 national emergency (the “Outbreak Period”). Please see our alert on the 2020 Notices found here.
ERISA section 518 and Internal Revenue Code section 7508A(b), however, permit the DOL and the IRS to extend deadlines only for one year, unless extended by the President 90 days before the end of the one-year period. President Trump did not take this action, so the relief in the 2020 Notices expired on February 28, 2021.
Recognizing that the COVID-19 national emergency is ongoing and that plan sponsors, participants, and beneficiaries continue to require relief, recently-issued EBSA Disaster Relief Notice 2021-01 provides that plans and individuals subject to the relief in the 2020 Notices will have the applicable periods disregarded until the earlier of (a) one year from the date that they were first eligible for relief under the 2020 Notices, or (b) the end of the Outbreak Period. Essentially, this means that the deadline suspensions apply for up to one year on an individual-by-individual basis. Notice 2021-01 provides the following illustrations.
- If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the deadline is delayed until February 28, 2021.
- If a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the deadline is delayed until the earlier of one year from that date (March 1, 2022) or the end of the Outbreak Period.
- If a plan was required to provide a notice or disclosure by March 1, 2020, the extension for the notice or disclosure would expire on February 28, 2021.
Accordingly, plan sponsors must determine when the 12-month period will expire for any disclosure or election delayed under the 2020 Notices. Disclosures and elections are back on the clock as of 12 months following the date they were delayed under the 2020 Notices (or as of the end of the Outbreak Period, if earlier). For example:
- A COBRA, HIPAA, or other covered election or notice period that would have commenced on March 1, 2020, will now commence on March 1, 2021.
- An election or notice period that would have commenced on May 1, 2020 will begin on May 1, 2021.
- An election or notice period that would have commenced on April 1, 2021 will commence as of the earlier of (a) April 1, 2022; and (b) the end of the Outbreak Period.
Plan administrators should notify affected participants or beneficiaries of their specific deadlines.
EBSA Disaster Relief Notice 2021-01 is found here.