Skip to main content
Top Button
Employer Action Required: Guidance on Plan Deadline Extensions During the National Emergency Employer Action Required: Guidance on Plan Deadline Extensions During the National Emergency

Employer Action Required: Guidance on Plan Deadline Extensions During the National Emergency

The Department of Labor (DOL) issued Disaster Relief Notice 2021-01 on February 26, 2021, giving guidance to plans and employers on how to administer the extension of certain plan participant deadlines under health and retirement plans that were set to expire by law on March 1, 2020. The guidance states the deadline extensions should be administered on an individual-by-individual basis and will continue to be tolled while we are in the COVID-19 National Emergency.

The DOL and Internal Revenue Service (IRS) issued a Joint Notice on May 4, 2020, that extended a number of plan participant deadlines under health and retirement plans to provide COVID-19 related relief. These deadlines included: (i) enrolling in a health plan upon a HIPAA special enrollment event, (ii) electing COBRA continuation coverage, (iii) making COBRA premium payments, (iv) notifying the plan of a COBRA qualifying event or determination of disability, (v) providing a COBRA notice, and (vi) filing a claim, appeal, or request for external review. The Joint Notice required plans to disregard the period beginning March 1, 2020, through the end of the 60-day period after the National Emergency terminates, in determining the date by which any action is required or permitted to be completed. By law, however, the extension cannot exceed one year. See our May 4, 2020 e-bulletin for more information.

While the National Emergency is ongoing, the extension by law ended on March 1, 2021, and it was not clear if any relief would extend beyond this date. To answer this question, the DOL issued Disaster Relief Notice 2021-01 on February 26, 2021, providing that individuals and plans with timeframes that are subject to the relief under the prior Notice will have the applicable periods disregarded until the earlier of: (i) one year from the date the deadline period would have begun running for the plan or individual or (ii) 60 days after the end of the National Emergency, but that the disregarded period cannot extend beyond one year. When the disregarded period ends, the timeframes for the affected individuals and plans will resume. In other words, Notice 2021-01 provides that the extended deadlines will apply on an individual-by-individual basis.

For example, if a qualified beneficiary’s COBRA election period started June 1, 2020, the qualified beneficiary’s disregarded period would end May 31, 2021, and her 60-day period to make a COBRA election would begin June 1, 2021. As another example, if a qualified beneficiary’s COBRA election period started on March 15, 2021, then his disregarded period would end March 14, 2022, and his 60-day period to make a COBRA election would begin March 15, 2022, so long as the National Emergency continues.

Notice 2021-01 further states that the plan fiduciaries should consider affirmatively sending a notice regarding the end of the relief period if the plan administrator or fiduciary knows or reasonably should know that the end of the relief period would expose a participant or beneficiary to a risk of losing protections benefits or rights under the plan. Additionally, earlier plan disclosures may need to be reissued or amended to correct earlier information as to the deadline by when participants and beneficiaries must take action. Finally, the Notice states that plans should consider ways to notify plan participants and beneficiaries losing coverage under the group health plan of other coverage options, including the availability in 36 states of a special enrollment period through May 15 for coverage under the Health Insurance Marketplace.

Employers should work with their third-party administrators to implement these new extensions, and will need to determine what communications may be needed to provide timely information to plan participants and beneficiaries of the extended deadlines and health coverage alternatives. Given that the extensions will be unique for each individual, this may prove to be a challenging exercise.

If you have any questions regarding Notice 2021-01 or this e-bulletin, please contact Chris Sears, Tara Sciscoe, Shalina Schaefer, or your Ice Miller Employee Benefits attorney.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
 
View Full Site View Mobile Optimized