Agencies Release COVID-19-Related Relief for Group Health Plans and Other Welfare Benefits

Recognizing the difficulties faced by plan sponsors, administrators, and participants during the COVID-19 emergency, the DOL’s Employee Benefits Security Administration (EBSA) and the IRS have issued a joint rule, formal notice, and FAQs, providing relief from certain pre-established deadlines for group health plans, other welfare benefits, and retirement plans (see our Checkpoint article). The guidance applies to all plans covered by ERISA or the Code, and HHS has announced it will extend similar relief to non-federal governmental health plans. Here are highlights affecting health and welfare plans:

• Deadline Extensions. The guidance broadly extends numerous plan deadlines applicable to participants and administrators, and the rule gives several examples. Specifically, the “outbreak period” beginning March 1, 2020, and ending 60 days after the announced end of the COVID-19 emergency is to be disregarded for the following purposes:

  • COBRA. Multiple COBRA deadlines have been extended until after the outbreak period ends, including (1) the 30- or 60-day deadline for employers or individuals to notify the plan of a qualifying event; (2) the 60-day deadline for individuals to notify the plan of a determination of disability; (3) the 14-day deadline for plan administrators to furnish COBRA election notices; (4) the 60-day deadline for participants to elect COBRA; and (5) the 45-day deadline in which to make a first premium payment and 30-day deadline for subsequent premium payments.
  • HIPAA Special Enrollment. The 30- and 60-day HIPAA special enrollment periods are extended. Thirty-day special enrollment periods may be triggered when eligible employees or dependents lose eligibility for other health plan coverage in which they were previously enrolled, and when an eligible employee acquires a dependent through birth, marriage, adoption, or placement for adoption. Sixty-day special enrollment periods may be triggered by changes in eligibility for state premium assistance under the Children’s Health Insurance Program.
  • Claims Procedures. The deadlines are extended for individuals to file claims for benefits, for initial disposition of claims, and for providing claimants a reasonable opportunity to appeal adverse benefit determinations under ERISA plans and non-grandfathered group health plans. (Group health plans and disability plans generally must allow at least 180 days in which to appeal; other welfare benefit plans must allow 60 days.)
  • External Review Process. Non-grandfathered group health plan deadlines have been extended for providing a state or federal external review process following exhaustion of the plan’s internal appeals procedures. (State deadlines may vary; plans using a federal external review process must allow at least four months after the receipt of a notice of adverse benefit determination in which to request an external review.) Other deadlines that apply for perfecting an incomplete request for review are also extended.
• Furnishing Notices. Plans and responsible plan fiduciaries will not be treated as having violated ERISA if they act in good faith and furnish any notices, disclosures, or documents that would otherwise have to be furnished during the outbreak period (including those requested in writing by a participant or beneficiary) “as soon as administratively practicable under the circumstances.”
• Exchange Enrollment. The FAQs remind participants who lose their employer-sponsored health coverage that they qualify for a special enrollment period in which to enroll in an Exchange plan outside of the Exchange’s annual open enrollment period within 60 days before or after losing the coverage. Exchanges must also provide special enrollment periods for loss of coverage due to a family member’s death or when an employer stops contributing to COBRA. Individuals are also reminded that Exchange coverage may be more affordable than COBRA.
• Forms 5500 and M-1. The notice confirms that Form 5500 filing relief is provided in accordance with IRS guidance, which provides that filings otherwise due on or after April 1 and before July 15, 2020, are now due July 15, 2020 (see our Checkpoint article). In addition, the notice provides relief for Form M-1 filings for the same period of time. Form M-1 must be filed by multiple employer welfare arrangements (MEWAs) and certain other entities to report compliance with specified ERISA group health plan rules. [EBIA Comment: The regular deadline for annual Form M-1 filings is March 1, with an automatic 60-day extension available if timely requested. Since that extended deadline falls within the relief window, timely extended 2019 Form M-1 annual filings are now due July 15, 2020. Form M-1 also must be filed in certain other situations, either 30 days before a specified entity begins operations or within 30 days after the occurrence of a specified event; an automatic 60-day extension is available if timely requested. If the regular or extended deadline for a special filing falls within the relief window, that filing is now due July 15, 2020.]

EBIA Comment: Plan administrators and participants should welcome this relief as businesses and plan administration have been disrupted due to the COVID-19 emergency. However, administrative challenges will undoubtedly arise as plans implement the changes. The guidance acknowledges the uncertain duration of the COVID-19 pandemic and notes that additional guidance will be provided for specific parts of the country if necessary. For more information, see EBIA’s COBRA manual at Sections XVI.B (“Employer Must Notify Plan Administrator of Certain Qualifying Events”), XVII.E (“What Deadlines May a Plan Impose for Notices From Covered Employees/Qualified Beneficiaries”), XVIII.G (“When Must the Election Notice Be Sent?”), XIX.B (“Timing of Election”), and XXII.A (“Paying the COBRA Premium: Deadlines and Grace Periods”); EBIA’s HIPAA Portability, Privacy & Security manual at Section X (“Special Enrollment Rights”); EBIA’s ERISA Compliance manual at Sections XIX.G (“Form M-1 Obligations for MEWAs and Participating Employers”), XXXIV.F (“Timelines Under Group Health Claims Procedures”), XXXIV.M (“External Review Requirements”), and XXXV.E (“Timelines for Disability and Other Non-Health Decisions”); and EBIA’s Health Care Reform manual at Sections XV (“Appeals Process and External Review Requirements”) and XXI.A.3 (“Annual and Special Enrollment Periods Required for Exchanges”).

Contributing Editors: EBIA Staff.