In response to the COVID-19 pandemic, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, Departments) issued two additional pieces of guidance further expanding COVID-19 related relief to affecting health and retirement plans. The guidance includes:
- EBSA Disaster Relief Notice 2020-01 (Notice) titled “Guidance and Relief for Employee Benefit Plans Due to the COID-19 (Novel Coronavirus) Outbreak,” which was issued by the DOL in coordination with Treasury and HHS; and
- A final rule (Final Rule) jointly issued by the Departments entitled “Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak.”
This blog does not address the number provisions in the Final Rule and Notice that do not apply to health & welfare plans – for information on 401(k) plans contained in the guidance, see our blog entitled “DOL, IRS, EBSA Issue Guidance Further Expanding COVID-19 Relief for 401(k) Plans” for more details.
Disaster Relief Notice 2020-01
On April 29, 2020, the DOL’s Employee Benefits Security Administration (EBSA) announced the extension of deadlines for furnishing required notices and disclosures required under Title 1 of the Employee Retirement Income Security Act (ERISA) to plan participants, beneficiaries, and other persons (the Final Rule section below addresses HIPAA, COBRA, and Claims-Related timeframes).
Specifically, employee benefit plans and their fiduciaries will not violate ERISA for failure to timely furnish a notice, document, or disclosure that must be furnished between March 1, 2020, and 60 days after the announced end of the COVID-19 outbreak (Outbreak Period).
During the Outbreak Period, plan fiduciaries must continue to act in good faith and furnish the notice, document, or disclosure as soon as administratively possible to these individuals. The Notice states that good faith acts may include use of electronic alternative means of communicating with plan participations and beneficiaries who the plan fiduciary reasonably believes has effective access to electronic means of communication (e.g., email, text messages, and continuous access websites).
On May 4, 2020, the Departments published a Final Rule extending timeframes for employee benefit plans affected by the COVID-19 outbreak. The extensions apply to all plans covered by ERISA and the Internal Revenue Code (the Code) to disregard the following plan deadlines during the Outbreak Period beginning March 1, 2020, and until 60 days after the announced end of the COVID-19 emergency:
- The 30-day (or 60-day) period to request HIPAA special enrollment;
- The 60-day election period for COBRA continuation of coverage;
- The 14-day deadline to furnish COBRA election notices;
- The date for making COBRA premium payments;
- The date for individuals to notify the plan or a qualifying event or determination of disability;
- The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure (typically 180 days for group health plans and disability plans);
- 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; and
- 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.
Below are some examples to help illustrate the extensions required by the Final Rule. For the sake of these examples only, assume that the National Emergency Period ends on April 30, 2020. The Outbreak Period would end on June 29, 2020 (i.e., 60 days after the announced end of the COVID-19 emergency).
- Example 1
- If an individual receives a COBRA election on April 1, 2020, she would have a period ending 60 days after the end of the Outbreak Period – August 28, 2020, to make her COBRA election.
- Example 2
- An individual is already on COBRA as of March 1, 2020. Her February payment was timely but she did not make any payments for March, April, May, or June. Premium payments for a month are considered timely if made during the 30-day grace period. Her COBRA coverage during those months would be continued if she makes timely payments for all those months by July 29, 2020. If she makes payment for only 2 months of coverage by July 29, 2020, then she would have COBRA coverage for March and April of 2020 only.
- Example 3
- In the case of special enrollment, assume that an individual gives birth on March 31, 2020. Typically, she would have 30 days to enroll herself and her child in her employer’s plan. Due to the extension, the period before the end of the Outbreak Period is disregarded and she would have until 30 days after June 29, 2020 (i.e., July 29, 2020) to exercise her special enrollment rights.
For more information on either the Final Rule or Notice, the DOL has posted the following FAQs to help plan sponsors and participants better understand their rights and obligations during the COVID-19 outbreak.
Other COVID-19 Resources
For more information about how the COVID-19 crisis may affect your 401(k) plan and health & welfare plan, please visit our previous blogs below:
- IRS Extends Various 401(k) Deadlines in Response to COVID-19 Crisis
- Families First Coronavirus Response Act, Impact on Employers
- Coronavirus (COVID-19) Regulatory Resources for Employee Benefit Plans
- 401(k) Plans in the Age of COVID-19: Hardship Withdrawals, Loans, and Other Issues
- Congress Passes CARES Act in Response to COVID-19 Crisis, Contains 401(k) Ease-of-Access and Other Provisions
- The CARES Act and its Impact on Health Plans
- HIPAA Reminders During COVID-19
- HIPAA IQ: “Work-From-Home” Edition
The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice. As always, for specific questions concerning your health plan, or for help in operating your plan during the current COVID-19 crisis, please consult your own ERISA attorney or professional advisor.