Last year, federal agencies issued relief postponing various employee benefit plan deadlines during a defined “Outbreak Period” to help plans, participants and service providers impacted by the COVID-19 pandemic. The relief, in the form of a final rule, extended deadlines affecting COBRA continuation coverage, special enrollment periods, claims for benefits, appeals of denied claims and external review of certain claims. The Outbreak Period began on March 1, 2020 and was to last until 60 days after the announced end of the National Emergency, but under federal law, the period of relief cannot exceed one year. This means that the deadline for relief expired on February 28, 2021.
In anticipation of this expiration date, on February 26, 2021, the US Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued Disaster Relief Notice 2021-01 to provide guidance on the duration of the COVID-19-related relief regarding certain employee benefit plan deadlines during the Outbreak Period for participants and notice and disclosure requirements for plan sponsors.
In the guidance, the DOL affirmed its interpretation of the Employee Retirement Income Security Act (ERISA) limitation that the notice periods can be disregarded until the earlier of:
- One year from the date the participant was first eligible for the relief; or
- 60 days after the announced end of the National Emergency.
The guidance further states, “on the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume. In no case will a disregarded period exceed one year.”
This phrasing suggests that plan sponsors now must apply relief on a participant-by-participant basis, and the DOL provided some examples of how this would work:
- “If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the 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.”
Notice and Disclosures
In addition, a separate Disaster Relief Notice included deadline extensions for notices and disclosures required under ERISA which provided relief for plan sponsors on certain notice requirements. This new DOL guidance provides that plan sponsor relief also expires after a one-year period from the date of the relief. Therefore, 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 plan fiduciary would be required to ensure that the notice or disclosure was furnished on or before March 1, 2021.
The DOL goes on to state that this may mean where the plan administrator or other responsible plan fiduciary knows, or should reasonably know, that the end of the relief period for an individual action is exposing a participant or beneficiary to a risk of losing protections, benefits, or rights under the plan, the administrator or other fiduciary should consider affirmatively sending a notice regarding the end of the relief period.
The guidance also encourages group health plans to consider ways to ensure that participants and beneficiaries who are losing coverage under their group health plans are made aware of other coverage options that may be available to them, including the opportunity to obtain coverage through the Health Insurance Marketplace in their state. In this regard, in accordance with the President’s Executive Order 14009, a special enrollment period is available to consumers in the 36 states that use the HealthCare.gov platform from February 15 through May 15. At least 13 states plus the District of Columbia, which operate their own Marketplace platforms, are offering a similar opportunity.
For more information on the Health Insurance Marketplace special enrollment period, go to HealthCare.gov. For a list of states that do not use HealthCare.gov and links to their Marketplaces, visit: https://www.healthcare.gov/marketplace-in-your-state/.
Next Steps for Employers
Because participants and beneficiaries may encounter ongoing problems due to the COVID-19 pandemic, plan administrators should continue to make reasonable accommodations to prevent the loss of or undue delay in payment of benefits. In addition, plan disclosures issued prior to or during the pandemic may need to be reissued or amended if those disclosures failed to provide accurate information regarding the time in which participants and beneficiaries were required to act, such as COBRA election notices and claims procedure notices. HR Works will continue to monitor this development and provide updates as additional information becomes available.