The Department of Labor (DOL) recently issued EBSA Disaster Relief Notice 2021-01 (the “Notice”), which provides guidance on expiration of the COVID-19 extended participant deadlines.
The COVID-19 extended participant deadlines require group health plans to disregard the period from March 1, 2020 until sixty (60) days after the end of the COVID-19 National Emergency period with respect to requests for special enrollment, providing notice of a COBRA qualifying event, electing and paying for COBRA and filing claims and appeals.
The COVID-19 National Emergency period has not yet ended. However, the extended participant deadlines are subject to ERISA Section 518 and Code Section 7508(b), which allows for a period of up to one year to be disregarded in determining the date by which any action is required or permitted to be completed. One year from March 1, 2020, is February 28, 2021. As the February 28th date approached, employers, third-party administrators, and other vendors were unclear as to how to apply the extended participant deadlines.
The Notice clarifies that the extended participant deadlines apply on a case-by-case basis. In other words, each deadline beginning on or after March 1, 2020 would be suspended for one year from the date the deadline would have begun, or if sooner, 60 days after the date the COVID-19 National Emergency period ends.
This approach is likely to present a host of administrative difficulties for employer-sponsored group health plans and their vendors. For example, if a qualified beneficiary would have been required to make a COBRA election by April 1, 2021, the election requirement is delayed until the earlier of one year from that date (i.e., April 1, 2022) or, if sooner, 60 days from the end of the COVID-19 National Emergency period. However, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the extended participant deadline for that participant expired on February 28, 2021 (one year from the date the deadline would have begun without the extension).
Under the Notice, the DOL suggests that, due to the ongoing nature of the COVID-19 pandemic, the guiding principle for administrators of employee benefit plans is to act reasonably, prudently, and with the interests of the employees, beneficiaries, and others related to the extension of timeframes and the impact of same on these individuals. The Notice suggests that plan fiduciaries should make reasonable accommodations to prevent loss of coverage or delay in payment of benefits and that the plan fiduciaries should consider taking steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-existing timeframes.
The practical effect of this Notice is that employer-sponsored group health plans may want to provide proactive notices to individuals about the ending of their specific extended participant deadline, review and update existing documents (including COBRA notices, claims notices and appeals notices, special enrollment rights notices and summary plan description language regarding the same), and consider modifying employee notices regarding the loss of health coverage to include other options, such as the current Marketplace special enrollment period for the states that use the HealthCare.gov platform beginning February 15 and continuing through May 15.