Is Any Pandemic Relief Still Available for Employee Benefit Plans?

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on November 4, 2022.

As we approach our third new year since the first reported cases of COVID-19, related relief may seem like old news. Although much of the government-sponsored pandemic relief has expired, there are aspects that remain germane for employer-sponsored benefit plans.

Specifically, relief provided as part of the national emergency and the public health emergency declarations remains ongoing, along with the telehealth relief introduced in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and extended by the Consolidated Appropriations Act (CAA). Plan sponsors and administrators should be aware of special relief provisions that directly or indirectly affect group health plans and have a strategy for when the relief periods end.

National emergency and public health emergency

Former President Trump signed a proclamation declaring a national emergency concerning the COVID-19 outbreak in March 2020. In response, the Employee Benefits Security Administration (EBSA) issued EBSA Disaster Relief Notice 2020-01. It was subsequently followed in May 2020 by publication of the Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak by the Department of Labor, the Department of the Treasury, and the Internal Revenue Service, and then by EBSA Disaster Relief Notice 2021-01: Guidance on Continuation of Relief for Employee Benefit Plans and Plan Participants and Beneficiaries Due to the COVID-19 Outbreak.

These three notices ultimately announced implementation of the one-year extension provided for under ERISA § 518 (29 U.S.C. § 1148) and Internal Revenue Code § 7508A(b) (26 U.S.C. § 7508A(b)) for certain benefit plan deadlines. The notices tolled certain deadlines to the later of one year from the date the individual was first eligible for relief or 60 days after the announced end of the national emergency (the end of the outbreak period).

The notices impact the following:

• The deadline to elect COBRA
• The deadline to pay for COBRA
• The deadline to notify a group health plan of certain COBRA-qualifying events and of a disability determination by the SSA
• The deadline to send out COBRA election notices
• The deadlines to submit a claim or appeal for benefits, including extension of deadlines relating to external reviews
• The deadlines to elect HIPAA special enrollment

President Biden in February 2022 extended the national emergency declaration until March 1, 2023–though it could be extended again.

Until the national emergency ends, these extended deadlines still apply. As employers work with their insurers and third-party administrators, or respond to claims for benefits under both health and retirement plans, these extensions remain in effect. For employers subject to ERISA, there is a fiduciary duty to operate a plan in accordance with applicable law. In addition, ERISA’s reporting and disclosure requirements impose an obligation to disclose the extended deadlines to plan participants. For governmental employers, Health and Human Services (HHS) has concurred with the guidance in the notices, but later guidance clarified that governmental employers are not required to delay these deadlines in their benefit plans.

The public health emergency declared by the HHS secretary is separate from the national emergency declaration. Alex Azar, then the HHS secretary, declared the public health emergency in 2020 and it has been continually renewed by the HHS secretary at 90-day intervals. Relief contingent on an ongoing public health emergency includes the period for which group health plans must cover COVID-19 tests and vaccines without cost-sharing on an expanded basis. After the public health emergency expires, group health plans will be able to require that COVID-19 tests, testing-related services and vaccines be subject to cost-sharing if obtained from out-of-network providers.

The public health emergency declaration was extended by HHS Secretary Xavier Becerra for the 13th time on Oct. 13, 2022. The Biden administration has said it will provide at least 60 days’ notice before the public health emergency will end. Therefore, we expect news soon if there will not be another extension in January 2023.

Telehealth relief for HSA-eligible individuals

To be eligible to contribute to a health savings account (HSA), an individual may only be covered by a high deductible health plan (HDHP) and not any disqualifying coverage. An individual is not an HSA-eligible individual, even if enrolled in an HDHP, if the individual has other coverage that provides significant benefits in the nature of medical care or treatment before the minimum statutory deductible is met.

During the pandemic, first the CARES Act and then the CAA provided relief allowing pre-deductible coverage of telehealth services for HSA-eligible individuals without adversely affecting their ability to make or receive contributions to or from an HSA. Plan sponsors should note that there is a gap between the two laws in January, February, and March 2022, where pre-deductible telehealth coverage will generally render an individual ineligible to contribute to an HSA. This could require prorating the maximum HSA contribution for the year unless the special HSA rule applies. The special HSA rule allows an individual to make the full yearly contribution to an HSA (for 2022, $3,650 for self or $7,300 for family) as long as the individual is HAS-eligible on Dec. 1, 2022 and remains HSA-eligible for all of 2023.

The telehealth relief for HSA-eligible individuals expires on Dec. 31, 2022, unless Congress acts to extend it. Plan sponsors should review plan design and amend plans prior to the start of 2023 to ensure telehealth is not provided free or on a pre-deductible basis that would impact HSA eligibility, and to ensure this special rule is documented under its written cafeteria plan. Under ERISA, changes to a group health plan’s coverage of telehealth services also must be communicated to plan participants.

In conclusion, pandemic-related law changes continue to affect employee benefit plans. It is important to pay close attention to these changes as we approach the new year.