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Health and welfare plan time frames extended due to COVID-19

Health and Benefits
COVID 19 Coronavirus

By Ben Lupin and Kathleen Rosenow | May 11, 2020

The “frozen period” is effective from March 1, 2020, until 60 days after the end of the declared COVID-19 national emergency.

The Departments of Labor (DOL) and Treasury (the departments) have issued regulations extending certain deadlines under ERISA and the Internal Revenue Code for group health plans; disability and other welfare plans; pension plans; and their participants and beneficiaries affected by the COVID-19 pandemic. The final rule provides extra time to meet deadlines affecting COBRA continuation coverage, special enrollment periods under the Health Insurance Portability and Accountability Act (HIPAA), claims for benefits, appeals of denied claims and external review of certain claims.

The “frozen period” is effective from March 1, 2020, until 60 days after the end of the national emergency (defined in the regulations as the “Outbreak Period”), so there is no set “end date” at this time. In the event end dates differ throughout the country, the departments will issue additional guidance.

The DOL also issued Frequently Asked Questions to help plan participants, beneficiaries, sponsors and employers affected by the COVID-19 outbreak understand their rights and responsibilities under ERISA.

The Department of Health and Human Services will extend similar time frames to non-federal governmental group health plans and health insurance issuers offering coverage under the Public Health Service Act.

Background

On March 13, President Trump declared a national emergency due to the COVID-19 outbreak. As a result, participants and beneficiaries covered by group health plans, disability or other employee welfare benefit plans, and employee pension benefit plans may have difficulty exercising their health coverage portability and continuation coverage rights, or filing or perfecting their benefit claims. Affected plans may also face challenges in complying with certain notice obligations. In response, the departments have provided extra time for meeting certain deadlines, detailed below.

Time frames extended

All group health plans as well as disability and other employee welfare benefit plans subject to ERISA or the tax code must disregard the Outbreak Period for the following time frames:

HIPAA special enrollment periods

  • The 30-day period to request special enrollment
  • The 60-day period for those who lose coverage under a state Children's Health Insurance Program or Medicaid or who are eligible to receive premium assistance under those programs

COBRA

  • The 60-day election period for COBRA continuation coverage
  • The date for making COBRA premium payments (typically 45 days for the initial premium and made no later than 30 days after the first day of the period for which payment is being made for subsequent premiums)
  • The date for individuals to notify a group health plan of a qualifying event or determination of disability under COBRA
  • The date for employer plan sponsors to provide a COBRA election notice under ERISA and the tax code

Generally, an employer has 30 days from the loss of group health plan coverage to notify the plan administrator, then the plan administrator has 14 days to provide a COBRA election notice to the qualified beneficiary. While the regulations allow for the extension, employers are encouraged to provide the notices within the normal statutory time frames, when possible, to make continued coverage available to affected employees as soon as possible and to allow employees to elect and start paying for COBRA coverage before owing multiple months’ worth of back premiums.

Claims procedures

  • The date within which individuals may file a benefit claim under a plan’s ERISA claims procedures
  • The date within which claimants may file an appeal under a plan’s ERISA claims procedures

External review process

  • The date within which claimants may file a request for an external review under a group health plan
  • The date within which a claimant may file information to substantiate a request for external review if the initial request was not complete

Examples

Below are a few examples provided in the regulations based on the assumption that the national emergency ends on April 30, 2020, with the Outbreak Period ending on June 29, 2020 (the 60th day after the end of the national emergency).

  • Electing COBRA: Employee A participates in an employer-sponsored group health plan. Due to the national emergency, A has a COBRA-qualifying event when his hours are reduced, and he loses plan eligibility and has no other coverage. A is provided a COBRA election notice on April 1, 2020, and under COBRA must make an election for COBRA within 60 days. Under the departments’ regulations, the deadline for A to elect COBRA is 60 days after June 29, 2020 (the end of the Outbreak Period), which is August 28, 2020.
  • HIPAA special enrollment period: Employee B is eligible for, but previously declined participation in, her employer-sponsored group health plan. On March 31, 2020, B gave birth and wants to enroll herself and the child in her employer’s plan midyear. B and her child qualify for HIPAA special enrollment in her employer’s plan as early as the date of the child’s birth. Under the departments’ regulations, B may exercise her HIPAA special enrollment rights for herself and her child until 30 days after June 29, 2020, which is July 29, 2020, provided that she pays the premiums for any period of coverage.
  • Group health plan claims: Employee C is a participant in an employer-sponsored group health plan. On March 1, 2020, C received medical treatment for a condition covered under the plan but did not submit a claim until April 1, 2021. Under the plan, claims must be submitted within 365 days of the date of service. C’s claims are timely because under the departments’ regulations, C’s last day to submit a claim is 365 days after June 29, 2020, which is June 29, 2021.

Going forward

Employers should update their benefit administration systems and procedures or work with their third-party administrators and insurance carriers (for fully insured plans) to administer their benefit plans within the extended time frames.

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Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

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