EBSA Disaster Relief Notice 2021-01
The DOL has issued EBSA Disaster Relief Notice 2021-01, clarifying the duration of certain COVID-19-related deadline extensions. As background, the DOL and IRS issued guidance last year specifying that the COVID-19 outbreak period—defined as the period beginning March 1, 2020, and ending 60 days after the announced end of the COVID-19 national emergency—is disregarded when calculating various deadlines under COBRA, ERISA, and HIPAA’s special enrollment provisions (see our Checkpoint article). The original emergency declaration would have expired on March 1, 2021, but it was recently extended. Although the agencies defined the outbreak period solely by reference to the COVID-19 national emergency, they relied on statutes allowing them to specify disregarded periods for a maximum of one year. Therefore, questions arose as to whether the outbreak period was required to end on February 28, 2021, one year after it began.
The notice answers those questions (in the nick of time) by providing that the extensions will continue past February 28 and will be measured on a case-by-case basis. Specifically, applicable deadlines for individuals and plans that fall within the outbreak period will be extended (that is, the disregarded period will last) until the earlier of (1) one year from the date the plan or individual was first eligible for outbreak period relief, or (2) the end of the outbreak period. Once the disregarded period has ended, the timeframes that were previously disregarded will resume. Thus, the outbreak period will continue until 60 days after the end of the COVID-19 national emergency, but the maximum disregarded period for calculating relevant deadlines for any particular individual or plan cannot exceed one year. The notice provides examples, including one in which a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, but instead the deadline is extended until February 28, 2021 (exactly one year), despite continuation of the outbreak period beyond that date. Similarly, a qualified beneficiary whose COBRA election was required by March 1, 2021 (presumably, disregarding the outbreak period), now has until March 1, 2022. [EBIA Comment: The notice does not explain why February 28 is considered to be one year in the first example, but March 1 is considered to be one year in the second example.]
The DOL indicates that plans should consider sending notices to participants regarding the end of the relief period, which may include reissuing or amending prior disclosures that are no longer accurate. Plans are also advised to consider notifying participants who are losing coverage of other coverage options, such as through the recently announced COVID-19 special enrollment period in the Exchanges. The notice acknowledges that the COVID-19 pandemic and other circumstances may disrupt normal plan operations and reassures fiduciaries acting in good faith and with reasonable diligence that enforcement will emphasize compliance assistance and other relief. The notice states that the IRS and HHS concur with its guidance and its application to laws under their jurisdiction.
EBIA Comment: Plan sponsors and administrators will welcome this clarification but will likely be disappointed in its timing and in how it interprets the one-year limitation. Determinations of the disregarded period that depend on individual circumstances will create significant administrative challenges, especially if COBRA subsidies are enacted as expected under pending legislation. In addition to making these case-by-case determinations, plan sponsors and administrators must quickly develop a strategy for communicating these complex rules to participants. For more information, see EBIA’s HIPAA Portability, Privacy & Security manual at Section X (“Special Enrollment Rights”), EBIA’s COBRA manual at Section VI (“Special Issues: COBRA and COVID-19”), EBIA’s Self-Insured Health Plans manual at Sections XVI (“Enrollment”) and XXVI.E (“Timelines Under Group Health Plan Claims Procedures”), EBIA’s ERISA Compliance manual at Section XXXIV.F (“Timelines Under Group Health Claims Procedures”), EBIA’s Cafeteria Plans manual at Section XVI.N (“Mandatory and Discretionary Claim-Related Extensions Due to COVID-19”), and EBIA’s Health Care Reform manual at Section XV (“Appeals Process and External Review Requirements”).
Contributing Editors: EBIA Staff.