Group Health Plans: Deadline Extensions Due to COVID-19 - Part 2 | M3 Insurance

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Group Health Plans: Deadline Extensions Due to COVID-19 – Part 2

COVID-19, News/Education

This post contains information specific to the private sector. Public Sector employers should review this OCI Guidance: https://m3ins.com/wi-oci-issues-bulletin-on-group-health-plan-extension/

On February 26, 2021, the Department of Labor (DOL) and the Employee Benefits Security Administration (EBSA) issued EBSA Disaster Relief Notice 2021-01. This notice addresses previous guidance issued in May 2020 regarding group health plan deadline extensions during the COVID-19 outbreak.

ERISA Section 518 and IRC Section 7508A(b) provide that during a Presidentially Declared Disaster (PDD) or public health emergency, the Departments may allow a time period of up to one year for plans to disregard certain deadlines. Guidance was previously issued on May 4, 2020 and included a relief period for plan deadline extensions that began on March 1, 2020. The original relief period was to continue until sixty days after the end of the National Emergency (the “outbreak period”). Because the relief allowed under statute is limited to one year, the relief technically expired on February 28, 2021.

The new guidance clarifies that plans subject to the time frames must now apply the one year relief on an individual basis. The one year time frame is measured from the date the individual action would have otherwise been required or permitted. Individuals will now have relief based on the earlier of:

  • One year from the date the individual was first eligible for relief; OR
  • Sixty days after the announced end of the National Emergency (outbreak period).

In no case should the extension for any individual exceed one year.

The following examples were included in the deadline extensions guidance:

  • If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the Joint Notice delays that requirement until February 28, 2021, which is the earlier of one year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing).
  • If a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the Joint Notice 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.
  • If a plan would have been required to furnish a notice or disclosure by March 1, 2020, the relief under the Notices would end with respect to that notice or disclosure on February 28, 2021. The responsible group health plan fiduciary would be required to ensure that the notice or disclosure was furnished on or before March 1, 2021.

This new guidance has been reviewed by the Department of Treasury, IRS and HHS – and all departments concur with the continuation of relief. The DOL stresses that plan sponsors should continue to act in the interests of their workers and families, make reasonable accommodations to prevent the loss of or undue delay in payment of benefits, and take steps to minimize the possibility of the loss of benefits during this unprecedented time. 

Plan sponsors are encouraged to send notices regarding the relief period and reissue or amend any previously provided notices to accurately reflect this new guidance and the applicable time frames.

Key Takeaway

This notice from federal agencies should serve as a reminder to employers with sponsored group health plans when it comes to prior plan deadline extensions.  Employers would be well served to review their plans, monitor the federal definition of the “outbreak period” and apply the extensions as required.

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