Group Health Plans: Deadline Extensions Due to COVID-19
Senior Compliance Attorney
This post has been updated to note the end of the National Emergency (NE) on April 10, 2023. Please see End of National Emergency Resolution for updates.
On May 4, 2020, the Department of Labor, Employee Benefits Security Administration, Department of Treasury and the Internal Revenue Service published a new rule regarding the extension of deadlines for certain group health plans during the COVID-19 National Emergency. The rule was published to “minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established timeframes” and allow plan sponsors some leeway in complying with certain notice obligations. The provisions of this rule and the specific relief offered are outlined below.
HIPAA Special Enrollment
HIPAA provides for a special enrollment period of 30 days (60 days in the case of CHIPRA) for employees and dependents in the following circumstances: loss of eligibility for a group health plan or other insurance coverage, birth, marriage and adoption.
RELIEF: All group health plans subject to HIPAA special enrollment must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification for all plan participants, beneficiaries, qualified beneficiaries, or claimants in determining the 30-day period (or 60-day period, if applicable) to request special enrollment.
COBRA
COBRA continuation coverage provisions generally provide a qualified beneficiary a period of at least 60 days to elect COBRA continuation coverage under a group health plan. Plans are required to allow payment of premiums in monthly installments, and plans cannot require payment of premiums before 45 days after the day of the initial COBRA election. COBRA continuation coverage may be terminated for failure to pay premiums timely. Subsequent COBRA premium payments must be made within 30 days after the first day of the period for which premium is being paid. Notice requirements prescribe time periods for employers to notify the plan of certain qualifying events and for individuals to notify the plan of certain qualifying events or a determination of disability. Notice requirements also prescribe a time period for plans to notify qualified beneficiaries of their rights to elect COBRA continuation coverage.
RELIEF: All group health plans subject to COBRA must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification for all plan participants, beneficiaries, qualified beneficiaries, or claimants in determining:
• The 60 day election period
• The date for making COBRA premium payments
• The date for individuals to notify the plan of a qualifying event or determination of disability
Claims Procedure Timeframes
ERISA requires ERISA-covered employee benefit plans and non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage to establish and maintain a procedure governing the filing and initial disposition of benefit claims, and to provide claimants with a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary. Plans may not have provisions that unduly inhibit or hamper the initiation or processing of claims for benefits. Further, group health plans and disability plans must provide claimants at least 180 days following receipt of an adverse benefit determination to appeal (60 days in the case of pension plans and other welfare benefit plans).
RELIEF: All group health plans subject to the claims procedure timeframes must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification for all plan participants, beneficiaries, qualified beneficiaries, or claimants in determining the date by which individuals may file a benefit claim under the plan’s claims procedure.
External Review Process Timeframes
ERISA sets out standards for external review that apply to non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage and provides for either a state external review process or a Federal external review process.
Standards for external review processes and timeframes for submitting claims to the independent reviewer for group health plans or health insurance issuers may vary depending on whether a plan uses a State or Federal external review process. For plans or issuers that use the Federal external review process, the process must allow at least four months after the receipt of a notice of an adverse benefit determination or final internal adverse benefit determination for a request for an external review to be filed. The Federal external review process also provides for a preliminary review of a request for external review. The regulation provides that if such request is not complete, the Federal external review process must provide for a notification that describes the information or materials needed to make the request complete, and the plan or issuer must allow a claimant to perfect the request for external review within the four-month filing period or within the 48-hour period following the receipt of the notification, whichever is later.
RELIEF: All group health plans utilizing the federal review process must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification for all plan participants, beneficiaries, qualified beneficiaries, or claimants in determining:
- the date by which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedures;
- the date by which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination;
- the date by which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.
EXAMPLES OF RULE APPLICATION
The examples assume an end to the National Emergency on April 30, 2020 with the outbreak period ending June 29, 2020 (60 days after the end of the National Emergency).
Example 1: Electing COBRA
Individual A works for Employer X and participates in X’s group health plan. Due to the National Emergency, Individual A experiences a qualifying event for COBRA purposes as a result of a reduction of hours below the hours necessary to meet the group health plan’s eligibility requirements and has no other coverage. Individual A is provided a COBRA election notice on April 1, 2020. What is the deadline for A to elect COBRA?
Conclusion: In Example 1, Individual A is eligible to elect COBRA coverage under Employer X’s plan. The outbreak period is disregarded for purposes of determining Individual A’s COBRA election period. The last day of individual A’s COBRA election period is 60 days after June 29, 2020, which is August 28, 2020.
Example 2: Special Enrollment Period
Individual B is eligible for, but previously declined participation in, her employer sponsored group health plan. On March 31, 2020, Individual B gave birth and would like to enroll herself and the child into her employer’s plan; however, open enrollment does not begin until November 15. When may Individual B exercise her special enrollment rights?
Conclusion: In Example 2, the outbreak period is disregarded for purposes of determining Individual B’s special enrollment period. Individual B and her child qualify for special enrollment into her employer’s plan as early as the date of the child’s birth. Individual B may exercise her special enrollment rights for herself and her child into her employer’s plan until 30 days after June 29, 2020, which is July 29, 2020, provided that she pays the premiums for any period of coverage.
Example 3: COBRA Premium Payments
On March 1, 2020, Individual C was receiving COBRA continuation coverage under a group health plan. More than 45 days had passed since Individual C had elected COBRA. Monthly premium payments are due by the first of the month. The plan does not permit qualified beneficiaries longer than the statutory 30-day grace period for making premium payments. Individual C made a timely February payment, but did not make the March payment or any subsequent payments during the outbreak period. As of July 1, Individual C has made no premium payments for March, April, May, or June. Does Individual C lose COBRA coverage, and if so for which month(s)?
Conclusion: The outbreak period is disregarded for purposes of determining whether monthly COBRA premium installment payments are timely. Premium payments made by 30 days after June 29, 2020, which is July 29, 2020, for March, April, May, and June 2020, are timely, and Individual C is entitled to COBRA continuation coverage for these months if she timely makes payment. Under the terms of the COBRA statute, premium payments are timely if made within 30 days from the date they are first due. In calculating the 30-day period, however, the outbreak period is disregarded, and payments for March, April, May, and June are all deemed to be timely if they are made within 30 days after the end of the outbreak period. Accordingly, premium payments for four months (i.e., March, April, May, and June) are all due by July 29, 2020. Individual C is eligible to receive coverage under the terms of the plan during this interim period even though some or all of Individual C’s premium payments may not be received until July 29, 2020. Since the due dates for Individual C’s premiums would be postponed and Individual C’s payment for premiums would be retroactive during the initial COBRA election period, Individual C’s insurer or plan may not deny coverage, and may make retroactive payments for benefits and services received by the participant during this time.
Example 4: COBRA Premium Payments
Same facts as Example 3. By July 29, 2020, Individual C made a payment equal to two months’ premiums. For how long does Individual C have COBRA continuation coverage?
Conclusion: Individual C is entitled to COBRA continuation coverage for March and April of 2020, the two months for which timely premium payments were made, and Individual C is not entitled to COBRA continuation coverage for any month after April 2020. Benefits and services provided by the group health plan (e.g., doctors’ visits or filled prescriptions) that occurred on or before April 30, 2020 would be covered under the terms of the plan. The plan would not be obligated to cover benefits or services that occurred after April 2020.
Example 5: Claims for Medical Treatment Under a Group Health Plan
Individual D is a participant in a group health plan. On March 1, 2020, Individual D received medical treatment for a condition covered under the plan, but a claim relating to the medical treatment was not submitted until April 1, 2021. Under the plan, claims must be submitted within 365 days of the participant’s receipt of the medical treatment. Was Individual D’s claim timely?
Conclusion: Yes. For purposes of determining the 365-day period applicable to Individual D’s claim, the outbreak period is disregarded. Therefore, Individual D’s last day to submit a claim is 365 days after June 29, 2020, which is June 29, 2021, so Individual D’s claim was timely.
Example 6: Internal Appeal— Disability Plan
Individual E received a notification of an adverse benefit determination from Individual E’s disability plan on January 28, 2020. The notification advised Individual E that there are 180 days within which to file an appeal. What is Individual E’s appeal deadline?
Conclusion: When determining the 180-day period within which Individual E’s appeal must be filed, the outbreak period is disregarded. Therefore, Individual E’s last day to submit an appeal is 148 days (180¥32 days following January 28 to March 1) after June 29, 2020, which is November 24, 2020.
Example 7: Internal Appeal— Employee Pension Benefit Plan
Individual F received a notice of adverse benefit determination from Individual F’s 401(k) plan on April 15, 2020. The notification advised Individual F that there are 60 days within which to file an appeal. What is Individual F’s appeal deadline?
Conclusion: When determining the 60-day period within which Individual F’s appeal must be filed, the outbreak period is disregarded. Therefore, Individual F’s last day to submit an appeal is 60 days after June 29, 2020, which is August 28, 2020.
Key Takeaways
This rule from the federal agencies creates guidelines and extends plan administrative deadlines for plan sponsors during and after the national emergency caused by the COVID-19 pandemic. Employers with sponsored benefit plans should review these plans and watch for further guidance from federal agencies on this topic.
