On April 29, 2020, the Department of Labor’s Employee Benefits Security Administration division (“EBSA”) issued a package providing relief for employee benefit plan deadlines and requirements for plans affected by the COVID-19 pandemic (the “Pandemic”), including: (i) EBSA Disaster Relief Notice 2020-01 (the “EBSA Notice”), (ii) DOL COVID-19 FAQs for Participants and Beneficiaries, and (iii) a press release. Additionally, the EBSA and Internal Revenue Service (“IRS”) jointly published final regulations, providing for extensions of various benefit plan deadlines (the “Joint Regulations”).
The Joint Regulations
The EBSA/IRS Joint Regulations require that all group health plans, disability and other employee welfare plans, and all pension plans subject to ERISA or the Internal Revenue Code, disregard the “Outbreak Period” when determining certain plan deadlines. In other words, the deadlines listed below will not apply during the Outbreak Period and will not begin to run again until after the end of the Outbreak Period. The “Outbreak Period” is defined as beginning on March 1, 2020, and ending 60 days after the end of the COVID-19 National Emergency ends. The deadlines that this rule applies to include:
- The HIPAA special enrollment period for enrolling in a health plan following a life event such as loss of coverage, birth or adoption of a child, marriage, or placement of adoption (typically 30 days following the life event);
- The period during which plan participants are able to make a COBRA election (typically 60 days after the COBRA election notice is provided);
- Deadline to pay COBRA premiums (typically 45 days after making a COBRA election);
- The time to file a claim or an appeal for benefits (this varies depending on the plan) (NOTE: This does not extend the period that a plan has to respond to such a claim or appeal);
- The time to request an external review under a healthcare plan; and
- The deadline a plan has to provide a COBRA election notice.
This means that any employee who loses COBRA-eligible welfare plan coverage during the COVID-19 National Emergency period will have up to 120 days after the end of the COVID-19 National Emergency to make a COBRA election (60 days following the end of the emergency, plus another 60 days for the typical COBRA election period). After that, the former employee has another 45 days to make his or her first premium payment, meaning the former employee would not be required to make any COBRA premium payments during the Outbreak Period.
Due to the extension of time to file a claim for benefits, plan administrators will need to review any denials made after March 1 based on a failure to timely submit a claim,
such as claims for reimbursements under health FSAs or HRAs (but this will not apply to dependent care FSAs). Plan Administrators should coordinate with their claims administrator TPAs to make sure they are complying with these extensions.
While the regulations only explicitly apply to plans subject to ERISA and the Internal Revenue Code, they additionally state that the Department of Health and Human Services concurs with the regulations and will take a non-enforcement policy extending similar deadline relief to non-federal governmental group health plans and health insurance issuers providing coverage in connection with a group health plan.
The EBSA Notice
The EBSA Notice includes the following specific extensions and relief, to the extent needed by the plan
sponsor in light of the Pandemic:
Late Contributions – Remittance of participant contributions or loan repayments that are delayed solely due to the Pandemic (which are generally required to be remitted to the plan as soon as reasonably administratively possible).
Notices and Disclosures – Failures to timely provide notices (including blackout notices, SMMs, SPDs, claims procedure extension and denial notices, and responses to requests for plan documents), disclosures or any other documents required under ERISA, so long as:
- The plan sponsor is acting in good faith; and
- The notice, disclosure, or document is furnished as soon as administratively practicable under the circumstances.
- “Good faith” includes using electronic delivery to plan participants/beneficiaries if they are believed to have effective access, including email, text messages, and continuous access websites.
Plan Loan and Distribution Verification – Temporary relaxation of plan verification procedures for loans or distributions will be excused, so long as:
- Failure to verify is solely attributable to the Pandemic;
- The plan administrator still makes a good-faith diligent effort under the circumstances to comply with the verification procedures; and
- The plan administrator makes a reasonable attempt to correct any procedural deficiencies, such as assembling any missing documentation, as soon as administratively practicable.
| ||The Notice further states that the plan loan and distribution verification relief only applies to provisions under ERISA and does not relax IRS requirements, such as spousal consent requirements. |
Form M-1 Filings Deadlines – Form M-1 filing (for MEWAs) deadlines are extended to align with Form 5500 deadlines (now due on July 15, 2020).
Finally, the EBSA Notice provided for some general guiding principles, on which plans may rely for general relief when faced with various issues arising from the Pandemic. Those guiding principles include:
- Plans must act reasonably, prudently, and in the interest of the covered workers and their families who rely on their health, retirement, and other employee benefit plans for their physical and economic well-being.
- Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits or undue delay in benefit payments in such cases and should attempt to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames.
- The EBSA acknowledges that there may be instances when plans and service providers may be unable to achieve full and timely compliance with claims processing and other ERISA requirements. Its approach to enforcement will emphasize compliance assistance and include grace periods and other relief where
appropriate, including when physical disruption to a plan or service provider’s principal place of business makes compliance with pre-established time frames for certain claims’ decisions or disclosures impractical.
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