COVID-19 Extension of Certain HIPAA/COBRA/ERISA Deadlines (Benefit Minute)
On April 29, the Department of Labor (DOL) issued Disaster Relief Notice 2020-01, as well as a proposed final rule that would extend certain timeframes applicable to employee benefit plans and their participants and beneficiaries, including special enrollment timeframes, COBRA deadlines, and ERISA claims procedure deadlines in response to the COVID-19 emergency. The guidance is intended to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established timeframes.
The Disaster Relief Notice also includes retirement plan provisions which are beyond the scope of this Benefit Minute.
The final rule provides that all group health plans, disability plans and other employee welfare benefit plans subject to ERISA must disregard the “Outbreak Period” for all plan participants, beneficiaries and qualified beneficiaries when determining certain notice and payment deadlines. The Outbreak Period is defined as the period from March 1, 2020 until 60 days after the announced end of the National Emergency, or such other date as announced by DOL. Different parts of the country may have different Outbreak Period end dates. This means the applicable timeframes are tolled during the Outbreak Period.
The impacted deadlines are:
- The 30-day period (or 60-day as applicable) to request a HIPAA special enrollment right;
- The 60-day election period for COBRA;
- The date for making COBRA premium payments (usually a 30 day grace period applies after payment of the first month’s premium);
- The 60-day period for participants to notify the plan of a COBRA qualifying event (e.g. divorce) or determination of disability;
- The deadline for filing a claim for benefits; and
- The deadline for filing an appeal or a request for an external review of a denied claim.
Importantly, with respect to group health plans and their sponsors and administrators, the final rule states the Outbreak Period shall be disregarded when determining the date for providing a COBRA election notice. Generally the COBRA election notice must be provided within 44 days of the loss of coverage (when the employer is also the Plan Administrator). This provides additional time (if needed) to notify qualified beneficiaries of their rights to elect COBRA continuation coverage.
Some examples of the applicable deadlines are set forth below, with an assumption that the National Emergency ends on May 31, which means for purposes of these examples only the Outbreak Period ends July 30.
HIPAA special enrollment: An employee has a child on March 31 (during the Outbreak Period). The days that are counted towards the 30-day HIPAA special enrollment period will not begin until the end of the Outbreak Period, so the employee may exercise their special enrollment right at any time from date of birth until August 29 (30 days after July 30). Coverage for the child would be retroactive to March 31 and premium payment for the entire period would be required.
COBRA election: An employee experiences a reduction in hours and is no longer eligible for the group health plan as of March 31. The COBRA Administrator provides a COBRA election notice on April 1. The individual may elect COBRA up until September 28 (60 days after July 30), and coverage must be provided retroactively back to April 1 if premium payment is made.
COBRA premium payments: On March 1, an individual was on COBRA. The individual paid the COBRA premium for February, but has not paid March (which was due March 30 with the grace period) nor any other subsequent monthly premiums. As of July 30 (end of Outbreak Period), the individual has not paid COBRA premiums for March, April, May, June or July. As long as payments for these months are made by August 29 , they will be considered timely. If the individual makes a payment by August 29 equal to two months of premiums, the individual would have COBRA coverage for March and April only.
Until the end date of the National Emergency and related Outbreak Period is known, employers will need to be aware of these extended deadlines, especially as employees request HIPAA special enrollment rights. COBRA administration will also be more complex as administrators and insurers manage retroactive reinstatement of coverage and delayed premium payments.
The extended deadlines do not apply to Section 125 qualifying events that are not also HIPAA special enrollment rights. To date, the IRS has not provided any COVID-19 relief related to section 125.
For plans not subject to ERISA and for health insurers, the Department of Health and Human Services will encourage these entities to provide similar relief to participants and beneficiaries and to operate in a manner consistent with the final rule.
Other Disclosures Required by ERISA
The Disaster Relief Notice also extends the deadline for furnishing of notices, disclosures, and other documents required by Title I of ERISA. This includes SPD, SMMs, SARs and SBCs. An employee benefit plan and the responsible plan fiduciary will not be in violation of ERISA for a failure to timely furnish a notice, disclosure, or document that must be furnished during the Outbreak Period, if the plan and responsible fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances. Good faith acts include use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages, and continuous access websites.