The Department of Labor, Internal Revenue Service, and Treasury issued joint regulations on May 4, 2020 that extend a number of employee benefit plan deadlines during the COVID-19 outbreak. The regulations are effective as of March 1, 2020 and extend a range of plan deadlines until 60 days after the declared end of the COVID-19 National Emergency. This period is referred to as the “Outbreak Period” in the regulations. The plan deadlines that are extended for the duration of the Outbreak Period are:
- The COBRA qualifying event notification period, COBRA election period, and the premium payment due dates for COBRA qualified beneficiaries
- The COBRA election notification deadline for plan sponsors
- The 30-day period (60 days for Medicaid and CHIP eligibility changes) for participants to provide notification of qualifying events for HIPAA special enrollment rights
- The deadlines for participants to submit claims or appeals of claim determinations
- The deadlines for participants to submit requests for external appeals or submit additional information or documentation to support an external appeal
Additional notable provisions in the regulations are:
- Although a number of the provisions are specific to health plans, other welfare benefit plans and pension plans are also subject to these regulations, as applicable (e.g., claim and appeal deadlines).
- The regulations apply to both new and existing events and claims during the Outbreak Period (e.g., current COBRA participants now receive relief of payment deadlines; any open periods for claim submission or appeal are extended).
- These regulations apply to private sector plan sponsors. They are not directly applicable to government group health plans, which are regulated by the Department of Health and Human Services (HHS). However, the regulations indicate that HHS “concurs” with the substance of the regulation and that “HHS encourages plan sponsors of non-Federal governmental group health plans to provide relief similar to that specified in this document.”¹ HHS is expected to provide substantially similar regulatory guidance.
Complexity for Plan Sponsors
These deadline extensions provide well intentioned relief. However, plan sponsors will face more administrative complexity while the Outbreak Period remains in effect. In particular, COBRA requires that all elections are retroactive to the date of the loss of coverage due to a qualifying event. A long extension of the COBRA election and premium payment periods would increase the challenges of maintaining plan eligibility, collecting premium, and managing adverse claim risk exposure. Plan sponsors may consider pending claim payments for COBRA qualified beneficiaries who have not yet elected coverage and/or paid the required premium. If they do so, plan sponsors and their claim payers would need to provide a more detailed description of a participant’s enrollment status to any healthcare providers seeking confirmation of coverage.
The regulations contemplate the possibility that the declared end of the National Emergency could occur on varying dates by region of the country. In such case, additional regulatory guidance would be needed to clarify how the duration of the Outbreak Period would be defined (e.g., by the site of the plan sponsor vs. the residence of the plan participant).
This article provides a brief summary of current employee benefit plan issues. It does not, and is not intended to, constitute legal advice as BPAS is not authorized to practice law.
Steve Chase is Senior Vice President of BPAS Healthcare Consulting Services.
¹ 29 C.F.R. Parts 2560 and 2590 (2020)