In response to the current COVID-19 pandemic, the Employee Benefits Security Administration, Department of Labor (DOL), and Internal Revenue Service, Department of the Treasury recently issued a rule (the Joint Rule) announcing the extension of certain timeframes under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code) 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 extensions include the delay or suspension of certain COBRA, HIPAA special enrollment, and claims filing procedure deadlines applicable to participants, as well as the deadline for the plan administrator to provide the COBRA election notice.
Although no specific guidance has been issued with regard to a plan administrator’s affirmative obligation to proactively communicate these extensions to employees, ERISA imposes a general fiduciary obligation on fiduciaries to keep plan participants apprised of their rights under an ERISA plan. As such, summaries of material modification may be required and plan sponsors, administrators, and fiduciaries, should examine their plan documents to determine the need for amendments.
Extension of Certain Claims Procedure Timelines and External Review Timeframes for Participants
ERISA-covered employee benefit plans, non-grandfathered group health plans, and health insurance issuers offering non-grandfathered group or individual health insurance coverage are required to establish and maintain a procedure governing the filing and initial disposition of benefit claims. They must also provide claimants with a reasonable opportunity to appeal an adverse benefit determination to an appropriate plan fiduciary. Certain timeframes for external review also apply.
Under the Joint Rule, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Code must disregard the period from March 1, 2020 until 60 days after the announced end of the National Emergency or such other date announced in a future notification (the Outbreak Period) for all plan participants, beneficiaries, qualified beneficiaries, or claimants in determining the following:
(1) The date within which individuals may file a benefit claim under the plan’s claims procedure,
(2) The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure,
(3) The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination, and
(4) The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.
Plan sponsors and administrators should take note that although the Joint Rule extends the date by which an individual must file a benefit claim or appeal an adverse benefit determination, it does not extend the deadline for plan administrators and other appropriate plan fiduciaries to decide benefit claims and appeals. Plans should continue to follow the plan’s claims procedures with respect to the plan administrator’s time to adjudicate a claim (note, however, that the pandemic may be a reason for the plan administrator to extend its normal determination period, but not beyond any extension period permitted under the plan’s normal claims procedures).
Employers should review their plan documents and summary plan descriptions for needed amendments and summaries of material modification in light of the extended claims periods provided in the Joint Rule. Any required amendments to plan documents must be made no later than Dec. 31, 2020, and it may be prudent to issue summaries of material modification as soon as administratively practicable.
Extension of HIPAA Special Enrollment Period in Certain Circumstances
HIPAA requires a special enrollment period in certain circumstances, such as when an employee or dependent loses eligibility for any group health plan or other health insurance coverage in which the employee or the employee's dependents were previously enrolled, and when a person becomes a dependent of an eligible employee by birth, marriage, adoption, or placement for adoption. Generally, group health plans must allow such individuals to enroll in the group health plan if they are otherwise eligible and if enrollment is requested within 30 days of the occurrence of the event (or within 60 days, in the case of the special enrollment rights added by the Children's Health Insurance Program Reauthorization Act of 2009).
Under the Joint Rule, all group health plans subject to ERISA or the Code must disregard the Outbreak Period for all plan participants, beneficiaries, qualified beneficiaries, or claimants in determining the 30-day period (or 60-day period, if applicable) to request HIPAA special enrollment. In other words, until the end of the Outbreak Period, there is no deadline by which an employee must request enrollment under HIPAA’s special enrollment rules. As a result, employers must provide coverage once finally elected by the employee, possibly retroactive to March 1, 2020.
Extension of Certain COBRA Notice, Election, and Premium Payments Due Dates
The COBRA continuation coverage rules generally provide a qualified beneficiary a period of at least 60 days to elect COBRA continuation coverage under a group health plan. Under the COBRA rules, a premium is considered paid timely if it is made within 30 days of the first day of the period for which payment is being made and group health plans cannot require payment of premiums before 45 days after the date of the initial COBRA election.
COBRA also prescribes time periods for employers to notify the plan of the occurrence of certain qualifying events, for individuals to notify the plan of the occurrence of certain qualifying events or a determination of his or her disability, and for plans to notify qualified beneficiaries of their rights to elect COBRA continuation coverage.
Under the Joint Rule, all group health plans subject to COBRA must disregard the Outbreak Period (defined above) in determining the following:
(1) The 60-day election period for COBRA continuation coverage,
(2) The date for making COBRA premium payments, and
(3) The date for individuals to notify the plan of the occurrence of a COBRA qualifying event or determination of his or her disability.
Thus, during the Outbreak Period, there are no deadlines for qualified beneficiaries to elect COBRA continuation coverage, to make premium payments for COBRA continuation coverage, or to notify the plan of a qualifying event or disability determination.
Under the Joint Rule, the Outbreak Period is also disregarded when determining the date by which a group health plan, the plan sponsor, or administrator must provide a required COBRA notice (which means that a COBRA election notice is not required to be provided during the Outbreak Period), but the group health plan is required to provide COBRA coverage if the qualified beneficiary elects it. We believe it to be a best practice for plan sponsors, group health plans, and administrators to endeavor to provide COBRA-required notices within the unextended timeframes so that individuals are kept informed of their COBRA rights.
Unrelated to the pandemic, the DOL recently issued updated versions of the model COBRA general notice and the model COBRA election notice to ensure that qualified beneficiaries better understand the interactions between Medicare and COBRA. The DOL will consider use of the model notices, appropriately completed, to constitute compliance with the notice content requirements of COBRA.
For guidance on these and other employee benefit issues, please contact a member of our Employee Benefits and Executive Compensation Group.
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