As we described in our LawFlash from last spring, the US Department of Labor’s Employee Benefits Security Administration (EBSA) and the Internal Revenue Service (IRS) (collectively, the Agencies) issued EBSA Notice 2020-01 and a joint final rule (collectively, Guidance) suspending certain deadlines under the Employee Retirement Income Securities Act of 1974, as amended (ERISA) and the Internal Revenue Code of 1986, as amended (Code).
The EBSA and IRS issued the Guidance under authority of Section 518 of ERISA and Section 7508A(b) of the Code, which authorize the Agencies to suspend certain timeframes otherwise applicable to pension and other employee benefit plans for a period of up to one year.
Generally, the Guidance suspends timeframes for the following deadlines specific to group health plans:
- The 30-day period (or 60-day period, as applicable) to request a special enrollment opportunity under ERISA
- The 60-day election period to elect COBRA continuation coverage
- The date for making COBRA premium payments
- The date for individuals to notify the plan of a qualifying event or determination of disability
- The date within which individuals may file a benefit claim under the plan’s claims procedures
- The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedures
- The date within which claimants may file a request for an external review after receipt of a final internal adverse benefit determination
- The date within which a claimant may file information to perfect a request for external review, upon finding that the request was not complete pursuant to applicable appeal rules
- The date a plan sponsor or third-party administrator must provide a COBRA election notice
Under the Guidance, the deadlines to report the foregoing events under a group health plan were suspended effective March 1, 2020, until 60 days after the announced conclusion of the National Emergency due to COVID-19, which was referred to as the “Outbreak Period.” The Guidance, however, does not contemplate the notion that the period of National Emergency could run a full year from March 1, 2020, or even beyond. The one-year anniversary of the freeze on reporting the foregoing events ends on February 28, 2021, and a plain reading of the statute does not appear to permit an extension of the freeze. Furthermore, it is unclear if there are an additional 60 days that are added onto the tail end of the freeze after a period of one year. In other words, it may be that the Outbreak Period comes to a full stop on February 28, 2021.
The Agencies have not yet offered any guidance to plan sponsors and, as February 28, 2021, quickly approaches, plan sponsors are left wondering what steps they should take and what this all means. In anticipation of any guidance, plan sponsors should be prepared to fire up any suspended timeframes effective March 1, 2021, and should talk with their third-party administrators to implement an administrative process to begin the clock on any suspended timeframes.
Plan sponsors could also consider being more generous with the freeze, and offering participants additional time on the tail end to comply with any of the ERISA events listed above in order to lessen the participant and administrative burden as they ease back into business as usual. Finally, once a process has been settled on, plan sponsors should prepare communications describing the process to participants.