COVID-19 relief for group health plan participants only makes a difference if the participants know that relief is available and understand how to take advantage of it. As group health plans sort through the various COVID-19 relief laws and related guidance, it is important for plans to stay on top of the various notice obligations.
This newsletter highlights some pandemic-related notice requirements that group health plans may be facing in 2021, including: (1) notices regarding free COVID-19 testing and vaccine coverage requirements; (2) notices regarding COBRA, HIPAA special enrollment, and ERISA claims and appeals deadline extensions; (3) COBRA notices required by the American Rescue Plan Act (“ARPA”); and (4) notices required for optional cafeteria plan changes under the Consolidated Appropriations Act (the “CAA”), as clarified by IRS Notice 2021-15.
1. Notices Regarding Free COVID-19 Testing & Vaccine Coverage
By now, many group health plans have wrapped their brains around the required coverage of COVID-19 testing and vaccines without cost-sharing under the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). However, despite the fact that Congress enacted both the FFCRA and the CARES Act in the spring of 2020, DOL, HHS, and Treasury (the “Departments”) issued new FAQs on these rules on February 26, 2021.
Now may be a good time for group health plans to revisit their participant communications regarding COVID-19 testing and vaccines, to make sure the communications are consistent with (1) the legal requirements, as clarified in the latest FAQs linked above, and (2) the employer’s goals, which may have changed due to the evolving COVID-19 situation. For example, although not required, some employers may now want to consider voluntarily covering return-to-work COVID-19 testing for free as an incentive for employees to get back in the office.
Group health plans may also want to consider whether to update participants on the end-date for the requirement to provide free COVID-19 testing, which is currently set to last through July 19, 2021, unless HHS extends the COVID-19 public health emergency for another 90 days, which HHS is expected to do. Group health plans might consider offering free COVID-19 testing at least through the end of 2021 to avoid having to monitor the 90-day extensions and to potentially reduce the number of future notices.
For more information about free COVID-19 testing and vaccines, see SW Benefits Blogs, “Trump Signs Act Mandating Group Health Plans Cover COVID-19 Testing For Free” and “Get Ready, Get Set, to Cover COVID-19 Vaccines for Free,” and SW Benefits Updates, “Free COVID-19 Testing Extended for Another 90 Days” and “Asked and Answered: Agencies Issue FAQs on COVID-19 Requirements for Group Health Plans.”
2. Notices Regarding COBRA, HIPAA Special Enrollment, and ERISA Claims and Appeals Deadline Extensions
Many group health plans are still grappling with the required extension of certain COBRA, special enrollment, and ERISA claims and appeals deadlines under the Departments’ Joint Notice. To make matters worse, just as employers were beginning to think these deadline extensions would come to an end on February 28, 2021 due to a one-year statutory limit, the Employee Benefits Security Administration (“EBSA”) issued EBSA Disaster Relief Notice 2021-01 (“Notice 2021-01”), calling for the one-year limit to apply on an individual basis.
Notice 2021-01 clarifies that, for purposes of calculating the extended deadlines, plans must disregard the Outbreak Period until the earlier of (1) one year from the date an individual is first eligible for relief, or (2) 60 days after the announced end of the COVID-19 National Emergency. This leads to individual one-year deadline extensions, provided that the COVID-19 National Emergency is ongoing.
Notably, Notice 2021-01 does not explain how the individualized one-year limit affects the COBRA premium payment deadlines. For example, if an individual has already received a 1-year extension to elect COBRA, it is not clear if the individual’s deadline to make an initial COBRA premium payment would fall: (1) 45 days after the election; or (2) 45 days plus an additional one-year extension (assuming the COVID-19 National Emergency is ongoing) after the election. During a presentation sponsored by the American Bar Association on March 2, 2021, an IRS representative informally indicated that (2) is correct. Various groups have requested clarification, but Treasury and DOL have yet to issue official guidance on the issue.
In addition to elaborating on the one-year limit, Notice 2021-01 makes the following suggestions, which indicate that plans may have certain notice obligations related to the deadline extensions:
- Plans should consider affirmatively sending a notice regarding the end of the relief period when the end of the relief period for an individual action is exposing a participant or beneficiary to a risk of losing their plan benefits or rights.
- Plans may need to amend or reissue disclosures about the deadline extensions if the plan previously issued disclosures that failed to provide accurate information as to a participant’s deadlines.
- Group health plans should consider informing participants who are losing coverage of their other coverage options, including their option to enroll in state Marketplace coverage.
Employers should consider reviewing prior employee communications sent regarding the deadline extensions to determine whether any corrections are necessary based on Notice 2021-01 and to determine whether any additional communications are required. Unless further guidance is provided to explain how Notice 2021-01 applies to COBRA payments, employers will need to be careful addressing the issue in any communications.
For more information about these deadline extensions, see our SW Benefits Update, “Help for Employees Can Equal Headaches for Employers: Agencies Issue More Health and Welfare Relief for COVID-19.”
3. COBRA Notices Required by ARPA
As we previously reported, the enactment of ARPA in March made big COBRA waves for group health plans. Along with ARPA’s second COBRA election opportunity and premium subsidies, come two new notice requirements:
- By May 31, 2021, a special ARPA notice should have been provided to all individuals who became eligible to elect COBRA before April 1, 2021 and are now eligible for a second election opportunity and/or premium subsidy under ARPA. See DOL’s model notice here.
- Between 15-45 days before an individual’s COBRA premium subsidy expires, a special ARPA notice must be provided to alert the individual about the expiration. This requirement does not apply, however, if the expiration is caused by an individual becoming eligible for coverage under another group health plan. See DOL’s model notice here.
These two new ARPA notice requirements are in addition to the normal COBRA notice requirements. For qualified beneficiaries with qualifying events from April 1, 2021 through September 30, 2021, DOL released a new model COBRA general and election notice, which takes the ARPA premium subsidy into account.
Although DOL’s model COBRA notices are a useful tool, group health plans should consider whether any changes are appropriate based on their plan features. Additionally, group health plans may want to consider whether it makes sense to include additional information in their COBRA notices based on the recently-issued IRS Notice 2021-31, which is discussed in our SW Benefits Update, “Ironing Out the Wrinkles – IRS Answers 86 Questions About COBRA Relief Under the American Rescue Plan Act.” In fact, as reported in our SW Benefits Blog, “Subsidized COBRA Elections under ARPA Override COBRA Election Deadline Extensions,” the DOL model notices fail to address a key change from IRS Notice 2021-31, which impacts the COBRA election deadline extensions discussed above.
For more information about ARPA’s COBRA provisions and the required notices, see our SW Benefits Updates, “'Help Is on the Way’ – Important Changes to COBRA Under the American Rescue Plan Act” and “DOL Clarifies Key Provisions, Issues Model Notices for COBRA Relief Under ARPA.”
4. Notices for Cafeteria Plan Changes under the CAA and IRS Notice 2021-15
Finally, as detailed in our SW Benefits Update, “2021 Consolidated Appropriations Act Compliance Checklist for Plan Sponsors,” the CAA was enacted on December 27, 2020 and includes a number of changes for group health plans. Although the CAA changes do not all revolve around COVID-19 relief, the CAA does include temporary relief for health flexible spending accounts and dependent care assistance programs. IRS clarified this cafeteria plan relief by issuing IRS Notice 2021-15 on February 18, 2021. Employers implementing these optional cafeteria plan changes should keep in mind that such changes may require appropriate participant notices and plan amendments. After all, as stated at the beginning of this newsletter, participant relief only makes a difference if participants know that relief is available and understand how to take advantage of the relief.