Important Deadlines Delayed for Health and Welfare Plans due to COVID-19 Emergency: Impacts for Employer Plan Sponsors, Administrators, and Insurers

The Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) and the Department of Treasury and Internal Revenue Service (IRS) issued a notification of relief, effective immediately, that extends certain critical deadlines in health, disability, and other welfare plans (Deadline Relief).[1] This Deadline Relief requires that these plans extend certain deadlines that affect plan participants, beneficiaries, claimants and Consolidated Omnibus Budget Reconciliation Act (COBRA) qualified beneficiaries, by disregarding days during the COVID-19 “Outbreak Period” from counting toward statutory and regulatory timeframes.

The Outbreak Period began on March 1, 2020 and lasts until 60 days after the announced end of the “National Emergency” period for COVID-19 that was declared by the President.

These deadline extensions will impact employer plan sponsors, administrators and insurers.

Outbreak Period Deadline Extensions

1. Health Insurance Portability and Accountability Act (HIPAA) Special Enrollment Periods
   • Due to marriage, birth, adoption, or place for adoption of a child: 30-day period to enroll
   • Due to loss of other coverage: 30-day period to enroll
   • Due to loss of Medicare or State Children’s Health Insurance Program (SCHIP) coverage: 60-day period to enroll
   • Due to premium assistance from Medicare or SCHIP: 60-day period to enroll

   Example 1: Employee was married February 14, 2020 (15 days before March 1). The special enrollment due to marriage deadline is 30 days after the marriage date, which is calculated by counting the 15 days prior to March 1, then resuming the count starting 60 days after the end of the National Emergency. Employee will have until 75 days after the end of the National Emergency to enroll the employee’s new spouse.

2. COBRA Continuation Coverage (COBRA or COBRA coverage)
   • 60-day deadline to elect COBRA coverage
   • Deadlines for issuing COBRA election notices following a COBRA-qualifying event[2]
   • Deadlines for making COBRA premium payments
   • Deadlines for individuals to notify the plan of a qualifying event (such as notification of a divorce)
   • Deadline to notify the plan of a determination of disability by the Social Security Administration (for purposes of the 11-month disability extension provided by COBRA)

   Example 2: Terminated employee was sent COBRA election notice January 31, 2020 (30 days before March 1). The deadline to elect COBRA coverage is 60 days, which is calculated by counting the 30 days prior to March 1, then resuming the count starting 60 days after the end of the National Emergency. Employee has until 90 days after the National Emergency ends to elect COBRA coverage.

3. Claims and Appeals Procedures
   • Date by which a claim for benefits must be filed (for example, a plan may require claims to be filed within one year of the service date)
   • Date by which appeals are required to be made after an initial adverse benefit determination has been issued
   • Date by which a request for external review must be made
   • Date by which information to file additional information to perfect a request for external review must be submitted (available if the initial request was not complete)

   Example 3: Employee received medical treatment on March 1, 2020. Plan provides that all claims must be submitted within 365 days of the date they are incurred. Because the treatment was provided during the National Emergency, the claim deadline starts 60 days after the end of the National Emergency. Employee has until 425 days after the end of the National Emergency to submit the claim.

The DOL also issued a set of COVID-19 Frequently Asked Questions (FAQs) on the deadline delays described above and other matters. These FAQs are available here.

Impacts on Employer Plan Sponsors, Administrators and Insurers

There will inevitably be confusion over how these deadline extensions apply in practice; we hope the agencies will issue further guidance to help relevant parties comply.  We have identified impacts specific to certain populations:

Impacts on Employer Plan Sponsors

Employers should take steps to ensure their health, disability, and other welfare plans will be administered consistently with the Deadline Relief.  This will require working with insurance carriers and third-party administrators to confirm procedures will be revised accordingly.  It will also be necessary to communicate the changes to plan participants in an updated summary plan description or summary of material modifications.

Concurrently with the Deadline Relief, EBSA Disaster Relief Notice 2020-01 was issued, instructing plan fiduciaries to make reasonable accommodations to prevent the loss of benefits or undue delay in benefit payments to participants who encounter problems complying with pre-established timeframes due to the COVID-19 outbreak. The DOL also said its approach to enforcement “will emphasize compliance assistance and include grace periods and other relief where appropriate.”

Several of the answers included with the DOL FAQs direct participants to reach out to the plan administrator. Therefore, plan sponsors should expect an uptick in calls from welfare plan participants.

Impacts on Administrators and Insurers

Administrators and insurers will need to update systems, administrative procedures, and any participant-facing communication to accommodate the deadline extensions. Since it is currently unknown when the Outbreak Period will end, this will require monitoring of additional guidance from the IRS and DOL.

Where deadlines are specified in administrative contracts with employer plans, it may be necessary to amend these provisions.  Insurance policies may also need to be amended with appropriate regulatory approval.  

[1] Certain of these deadlines only apply to ERISA plans. However, the notification states that the Department of Health and Human Services concurs with the relief specified, and “encourages plan sponsors of non-Federal governmental group health plans to provide relief similar to that specified … to participants and beneficiaries, and encourages states and health insurance issuers offering coverage in connection with a group health plan to enforce and operate, respectively, in a manner consistent with the relief provided ….”

[2] Given participant concerns over maintaining group health coverage during the pandemic, plans should try to minimize delays in issuing COBRA election notices.