New DOL & IRS Ruling Affecting COBRA and More

May 13, 2020

On April 28, 2020, the Employee Benefits Security Administration (U.S. Department of Labor) and IRS issued a joint ruling titled Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak. This ruling provides temporary relief regarding certain COBRA, HIPAA special enrollment, and health and disability claims submissions and appeal rights.

We’ve reached out to our carriers to see how they will handle this new ruling and we will provide updates when we have more information. In the meantime, below is a quick summary of the ruling.

Basic Timeline

The rule requires certain deadlines to be put on hold from March 1, 2020, when the COVID-19 National Emergency began, until the end of the “Outbreak Period” which is 60 days after the National Emergency ends, or other date announced by the DOL and IRS in future notifications.

Affected Deadlines

The Outbreak Period is to be disregarded in determining the following deadlines:
30-day period (or 60-day period, if applicable) to request special enrollment
60-day election period for COBRA continuation coverage
Date for making COBRA premium payments
Date for individuals to notify the plan of a qualifying event or determination of disability
Date within which individuals may file a benefit claim under the plan's claims procedure
Date within which claimants may file an appeal of an adverse benefit determination under the plan's claims procedure
Date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination
Date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete

Examples

The DOL and IRS provided seven examples to help explain how these extensions would work in practice. For the purposes of the examples, they used April 30, 2020 as the end date of the National Emergency, which means the Outbreak Period ends on June 29, 2020 (60^th day after the end of the National Emergency).

Example 1 (Electing COBRA). (i) Facts. 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?

(ii) 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.

Please visit the Federal Register website for the six other examples.

Relief for Employers & Administrators Relief

The ruling, along with EBSA Disaster Relief Notice 2020-01, mention that the Outbreak Period shall be disregarded for plan administrators for certain notices, disclosures, or documents, but that administrators should act in good faith and distribute documents as soon as administratively practicable.

Resources

We hope to have more information for you soon as to how this ruling will affect you, your clients, and their employees.

Please contact your B&P Sales Rep at 888.722.3373 if you have you have any questions.

The information contained herein is for informational purposes only and is not intended as legal or tax advice.