Key Points:

• Several key deadlines for employee benefit plan participants are being extended due to the COVID-19 pandemic under guidance issued by the U.S. Department of Labor (DOL) and IRS.
• The deadline extensions could impose significant administrative burdens on plans and plan sponsors.

The Department of Labor (DOL) has issued new guidance extending key deadlines for participants in private sector plans subject to ERISA. For governmental health plans, the U.S. Department of Health and Human Services encourages plan sponsors to provide similar extensions to their participants.

COVID-19 “Outbreak Period” Must Be Disregarded in Determining Certain Timeframes

ERISA plan administrators must disregard the days between March 1, 2020 and the date that is 60 days after the announced end of the COVID-19 national emergency, referred to as the “Outbreak Period”, for purposes of the following timeframes:

• 30-Day (or 60-Day) HIPAA Special Enrollment Period
• 60-Day COBRA Coverage Election Period
• 45-Day Initial COBRA Premium and 30-Day Monthly COBRA Premium Due Dates
• 60-Day Period for Providing Notice to Plan of COBRA Qualifying Events
• Time Periods for Filing Plan Claims and Appeals
• Four-Month Period for Requesting External Review of Denied Health Plan Appeal
• 14-Day Period for Plan to Furnish COBRA Election Notice to Qualified Beneficiary

Plan administrators will not be treated as failing to operate their plan in accordance with its written terms, despite any written plan provisions that conflict with these extended timeframes.

Plan Administration Issues Resulting from Deadline Extensions

These deadline extensions raise a number of administrative issues for plan sponsors that may require coordination with insurance carriers and third-party administrators with respect to HIPAA special enrollment rights, COBRA elections, and timing of claims and appeals. Plan administrators also may want to review their cafeteria plan document to determine whether an amendment will be needed to accommodate these deadline extensions.

New COBRA Model Notices and Additional DOL Guidance

The DOL separately issued new model COBRA general and election notices on May 1, 2020, but these notices do not include any reference to the temporary extension of COBRA-related deadlines due to the COVID-19 pandemic. As explained in accompanying DOL FAQs, the new model COBRA notices provide additional information to address COBRA’s interaction with Medicare. While use of the model notices is not required, the DOL will consider use of the model notices, appropriately completed, to constitute compliance with the content requirements for COBRA notices.

The DOL also issued a set of Frequently Asked Questions (FAQs) on health benefit and retirement benefit issues to help participants and beneficiaries, plan sponsors, and employers impacted by the COVID-19 outbreak understand their rights and responsibilities under ERISA.

Finally, the DOL issued other guidance to provide relief for plan sponsors that may have difficulty complying with certain notice and disclosure obligations due to the COVID-19 pandemic. Please see our accompanying alert on that guidance.

If you have questions, please feel free to reach out to your contact in the Hanson Bridgett Employee Benefits Group.