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DOL guidance on end of COVID-19 ‘Outbreak Period’

Health and Benefits|Retirement
COVID 19 Coronavirus

By Anu Gogna , Benjamin Lupin and Kathleen Rosenow | March 9, 2021

Plan sponsors should take steps to address the end of the relief provided in the original Outbreak Period, which was set to expire February 28.

On February 26, 2021, the Department of Labor (DOL) issued guidance (EBSA Disaster Relief Notice 2021-01) addressing the end of the “Outbreak Period,” during which certain deadlines under ERISA and the Internal Revenue Code are extended to provide relief to employer-sponsored welfare benefit plans (including group health plans) as well as participants in those plans that have been affected by the COVID-19 pandemic.1 The original Outbreak Period was set to expire on February 28, 2021.

Last year, the DOL and Department of Treasury issued Outbreak Period rules that, in general, extended deadlines for the following requirements:

  • Making COBRA elections
  • Making COBRA premium payments
  • Providing COBRA election notices (from the plan administrator to qualified beneficiaries)
  • Requesting HIPAA special enrollments
  • Filing benefit claims or appeals or requesting an external review of an adverse benefits determination

Under the applicable law, the departments are only authorized to disregard a period of up to one year after a presidential national emergency declaration. In this case, former President Trump’s COVID-19 national emergency declaration was effective March 1, 2020. President Biden has issued a new COVID-19 national emergency declaration effective March 1, 2021; however, Biden’s declaration does not affect the departments’ relief provisions.

One-year period to be applied on an individual-by-individual basis

The new guidance clarifies that individuals and group health plans with time frames that are subject to the relief will have the applicable periods disregarded until the earlier of (1) one year from the date they were first eligible for relief, or (2) 60 days after the announced end of the National Emergency (i.e., the end of the Outbreak Period). A disregarded period cannot exceed one year.

The guidance provides the following examples:

  1. If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, that requirement is delayed until February 28, 2021 (i.e., the earlier of one year from March 1, 2020, or the end of the Outbreak Period, which remains ongoing).
  2. If a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the guidance delays that election requirement until the earlier of one year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.
  3. If a plan would have been required to furnish a notice or disclosure by March 1, 2020, the relief would end with respect to that notice or disclosure on February 28, 2021. The responsible plan fiduciary would be required to ensure that the notice or disclosure was furnished on or before March 1, 2021.

Reasonable accommodations

The guidance also reminds employers that the guiding principle for administering employee benefit plans is to act reasonably, prudently and in the interest of the workers and their families who rely on their health, retirement and other employee benefit plans for their physical and economic wellbeing.

Therefore, plan fiduciaries should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits and take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames. This would include (1) sending notices to employees informing them of the end of the relief period, and (2) providing information on other coverage options (e.g., the availability of health insurance coverage on the individual marketplace), if applicable.

Further, plan disclosures issued before or during the pandemic might need to be reissued or amended if they did not provide accurate information regarding the time in which participants and beneficiaries were required to take action (e.g., COBRA election notices and claims procedure notices).

Going forward

Plan sponsors should consult with their insurance carriers, third-party administrators and COBRA administrators on next steps to address the end of this relief, including required notices, communication and necessary actions to administer this guidance.

Footnotes

1 See “Health and welfare plan time frames extended due to COVID-19,” Insider, May 2020.

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Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

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