On Friday February 26, 2021, the Department of Labor (DOL) released Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2021-01. This Notice applies to the prior relief, Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak, which was announced by the Internal Revenue Service (IRS) and Department of Labor (DOL) on April 28, 2020. Notice 2021-01 clarifies that the timeframe extension applies on an individual basis. Additionally, an extension of the National Emergency was published in the Federal Register on February 26, 2021, so the National Emergency is ongoing at this time.
It is important to understand that Notice 2021-01 is separate from the recent DBS communication regarding the Consolidated Appropriations Act of 2021 that was signed into law on December 27, 2020.
As a background, the April 28, 2020 relief provided deadline extensions that affected COBRA continuation coverage, benefit claim submissions, special enrollment periods, appeals for denied claims, and requests for external review of certain claims. The relief applied to ERISA plans and extended these deadlines by disregarding the period of time from March 1, 2020 until 60 days after the announced end of the National Emergency. This period of time is known as the Outbreak Period. Non-ERISA plans were encouraged, but not required to extend these deadlines.
The deadline extensions were provided under authority of Section 518 of ERISA and section 7508A(b) of the Code. These Codes also limit the period of time that can be disregarded to “a period of up to 1 year.”
What Does the New Guidance Change?
The new guidance clarifies that the deadline extension is calculated on an individual by individual basis. According to the Notice, applicable timeframes will be disregarded until the earlier of:
• One year from the date the individual was first eligible for relief, or
• The end of the Outbreak Period (60 days after the announced end of the National Emergency)
What Does This Mean To Individuals?
Relief was available to individuals who had an applicable action, election, or payment that was required on or after March 1, 2020. The timeframe extension for some individuals has now ended because one year has passed since the relief first went into effect. The timeframe extension is still ongoing for other individuals, but will be ending on the earlier of: the one year anniversary of their original deadline date or the day the Outbreak Period ends (if an end to the National Emergency is announced). Example 1: An individual experienced a COBRA qualifying event on January 5, 2020. A Specific Rights Notice was issued on January 5, 2020 and provided the 60 day COBRA election deadline of March 5, 2020. However, due to the timeframe extension and because the National Emergency is ongoing, this individual’s election deadline was extended one year, until March 5, 2021. Example 2: An individual had an applicable action, election, or payment due by April 1, 2020. Because this original deadline occurred during the Outbreak Period, that deadline qualified for relief and was extended by the lesser of: 1) one year or 2) the end of the Outbreak Period. At this time, the Outbreak Period is ongoing; therefore, the deadline is extended by up to a maximum period of one year. The action, election, or payment will now be required by April 1, 2021 at the latest. This calculation will apply to the referenced deadlines unless or until an end to the National Emergency is declared or until other regulatory guidance is announced.
What Benefits, Actions, or Elections are Impacted?
The following COBRA deadlines are impacted by this relief:
• 60-day COBRA election
• 45-day initial COBRA premium deadline
• 30-day grace period for subsequent monthly COBRA premiums
• 60-day period that qualified beneficiaries have to notify the employer of a disability determination or secondary qualifying event
Health FSA and HRA Claim Runout Period Timeframes
Claim filing deadlines (plan year-end runout periods or terminated participant runout periods) that occurred on or after March 1, 2020 were/are temporarily extended for a maximum period of up to one year, depending on the length of the National Emergency.
Claim Appeal Deadlines for Health FSAs and HRAs
Claim appeal deadlines that occurred on or after March 1, 2020 have been temporarily extended for a maximum period of up to one year, depending on the length of the National Emergency.
External Review Process for HRAs
External Review request deadlines that occurred on or after March 1, 2020 have been temporarily extended for a maximum period of up to one year, depending on the length of the National Emergency.
HIPAA Special Enrollment Deadline
HIPAA Special Enrollment deadlines that occurred on or after March 1, 2020 have been temporarily extended for a maximum period of up to one year, depending on the length of the National Emergency.
What if I have questions about this?
Please contact our COBRA Department for COBRA related questions or our Claims Department for claims related questions at (800) 234-1229.
The link for the full text of DOL Notice 2021-01 can be found at https://www.dol.gov/sites/dolgov/files/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021-01.pdf
DBS will provide additional updates as more information becomes available or if additional relief is issued. DBS continues to consult with legal, association and other industry leaders and is not engaged in the practice of law. If there are additional legal questions regarding other specific benefit plan implications you should consult with your legal counsel.