COVID-19: DOL Issues Administrative Changes for Employee Benefit Plans

On April 28, 2020, the Department of Labor (DOL) and Internal Revenue Service (IRS) released a joint statement providing for temporary relief from certain timing requirements with respect to COBRA, HIPAA special enrollment and benefit claims (filing, appeal, external review). A final rule was also released, further detailing the relief. The final rule requires plans to disregard the “Outbreak Period” for purposes of the following timing requirements:

  • HIPAA Qualifying Change in Status:
    • 30-day (or 60-day, for CHIPRA) time period to request special enrollment in a group health plan (spouse or dependent loses coverage, individual becomes a new dependent, etc.)
  • COBRA:
    • Group Health Plan’s, Plan Administrator’s and/or Plan Sponsor’s period for sending COBRA election notices
    • Qualified Beneficiary’s 60-day period to elect COBRA
    • Initial 45-day payment period and 30-day grace period for premium payments
    • Qualified Beneficiary’s 60-day period to notify the Plan Administrator of a qualifying event, second qualifying event), or determination of disability
  • Claims:
    • Time period for a claimant to file a benefit claim
    • 180-day period to file an appeal
    • Time period to request external review or perfect an external review request

The “Outbreak Period” is defined in the final rule as the period beginning on March 1, 2020, and ending 60 days after the announced end of the COVID-19 national emergency or such other date announced by the agencies in a future notification. 

Sample Scenarios:

Assumes National Emergency is lifted on May 15th (with the Outbreak Period then ending on July 14th, the 60th day after the end of the National Emergency).

  1. Employee’s spouse loses coverage on April 2nd. Employee has until August 13th (30 days following July 14th) to notify Human Resources of the qualifying change in status to add spouse to the plan.
  2. Employee is laid off, and COBRA offered on May 1st. Employee (and any qualified beneficiaries) have until September 12th (60 days following July 14th) to elect COBRA.

New Model COBRA Notices:

On May 1, 2020, the DOL released Frequently Asked Questions and updated the General and Initial COBRA Notices for immediate use. The new notices can be found here. The updated notices include language to assist those employees approaching Medicare eligibility. These notices should be used as soon as administratively possible. For those employers utilizing a third party to administer COBRA, best practice would be to confirm the new forms are being utilized.

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