If I Could Turn Back Time… And Then Add a Year

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Holland & Hart - The Benefits Dial

Last October, Brenda Berg posted a blog titled “I’m Just Waiting on an… End to the Extended ERISA Deadline Periods.” In that blog, Brenda explained that the IRS and DOL extended certain deadlines applicable to retirement plans and health and welfare plans.

In sum, under last year’s DOL guidance, employers were required to disregard the period from March 1, 2020 until 60 days after the president declared the COVID Pandemic National Emergency over (the “Outbreak Period”) in calculating employee notices and election deadlines for deadlines including the following:

  • The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA
  • The 60-day election period for COBRA continuation coverage
  • The date for making COBRA premium payments
  • The date for individuals to notify the plan of a qualifying event or determination of disability under COBRA
  • The date within which individuals may file a benefit claim under the plan’s claims procedures
  • The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure
  • The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination
  • The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete
  • With respect to group health plans, and their sponsors and administrators, the date for providing a COBRA election notice

The Outbreak Period technically ended on February 28, 2021 in compliance with a federal law that limits the DOL’s ability to extend ERISA election periods to no more than 12 months. This past week, the DOL published additional guidance on the COVID-19 ERISA deadline relief (See EBSA Disaster Relief Notice 2021-1). The DOL adopted an approach where, in essence, each individual will have a one-year extension to elect COBRA, pay a premium or elect certain HIPAA special enrollment rights.

The immediate impact of this relief will be on any individual whose applicable ERISA deadline has already been extended for one year. Effective March 1, 2021, these individuals must complete their election or pay the applicable premiums within whatever period remained for those individuals as of February 28, 2020. In other words and for ease, one should calculate the due date for the applicable election or COBRA premium (under standard ERISA election rules) for an individual and add one year. That will be the new deadline applicable to that employee (unless the national emergency ends before that date). For example, an employee who was required to elect COBRA by July 31, 2020 (based on the standard 60-day election rule under COBRA) will now have until July 31, 2021.

The DOL calls on employers, pursuant to their fiduciary duties, to:

  • Consider notifying participants when their rights under the extended deadlines is reaching an end.
  • Update plan communications to make sure they correctly state deadlines (may need to revise or reissue any previously-issued communications).
  • Consider ways to make participants who lose coverage aware of their right to enroll in coverage through a Health Marketplace/exchange during the extended special enrollment period announced by President Biden. For employees covered by one of the federally run exchanges, the special enrollment period runs from February 15, 2021 to May 15, 2021. Some other state-run exchanges may have an abbreviated special enrollment period.
  • For example, the Colorado special enrollment period will run from February 8, 2021 to May 18, 2021.

Plan sponsors should identify their impacted plans and deadlines and determine whether any notices need to be updated or sent at this time. Plan sponsors should also check with their TPAs, COBRA administrators, etc. to confirm how they are administering this guidance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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