On March 13, 2020, President Trump issued the Proclamation on Declaring a National Emergency nationwide beginning March 1, 2020, as the result of the COVID-19 outbreak.
The Department of Labor (DOL) and the Department of the Treasury (Treasury) issued a final rule that extends certain timeframes under the Employee Retirement Income Security Act (ERISA) and Internal Revenue Code (IRC) for group health plans, disability, and other welfare plans, pension plans, and participants and beneficiaries of these plans during the COVID-19 national emergency. The timing extensions are issued to help alleviate problems faced by health plans to comply with strict ERISA and IRC timeframes and problems faced by participants and beneficiaries in exercising their rights under health plans during the COVID-19 national emergency.
The final rule provides the timeframe extensions based on the end date of the "national emergency" (as of the date of this publication, the national emergency end date has not been announced) and the end date of the "outbreak period" which is the 60th day after the end of the national emergency. Under the final rule the outbreak period will be disregarded, meaning the timeframes for the group health plan requirements noted below will not begin to run until after the outbreak period has ended. For examples of how this is to be seen in practice, please view page 11 of the final rule.
Example- Electing COBRA
- 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. Individual A is provided a COBRA election notice on April 1, 2020. What is the deadline for A to elect COBRA?
- Individual A is eligible to elect COBRA coverage under Employer X’s plan. The last day of Individual A’s COBRA election period is 60 days after June 29, 2020, which is August 28, 2020.
Some key points to keep in mind:
- This extension applies to both the standard COBRA 60-day election time frame as well as the 30-day grace period for premium payments. This means qualified beneficiaries can elect COBRA coverage and make payments up until 60 days after the end of the COVID-19 outbreak period.
- The deadline for individuals filing a claim for benefits under health FSAs and HRAs has also been extended.
- The above noted extensions are retroactive to March 1, 2020, the declared beginning date of the COVID-19 national emergency.
President Donald Trump has not yet declared an end date for the COVID-19 national emergency. Sixty days after the COVID-19 national emergency is declared over, the above noted extensions will be discontinued.