Recent Internal Revenue Service (IRS) and U.S. Department of Labor (DOL) guidance extends certain health and welfare plan administrative deadlines, and permits greater flexibility to participants to change group health plan elections and use funds in Flexible Spending Accounts (FSAs), Dependent Care Flexible Spending Account Plans (DCAPs), and Health Saving Accounts (HSAs).
Recently, DOL, jointly with the U.S. Department of the Treasury and IRS, issued guidance modifying the deadlines for: special enrollment rights under the Health Insurance Portability and Accountability Act (HIPAA); notification, election, and payments under COBRA; certain health and welfare claims and appeals deadlines; and Form 5500s and Form M-1 reporting. Under the guidance, disregard the period beginning March 1, 2020, and ending after a “to be announced” date at the end of the COVID-19 emergency (the Outbreak Period).
- HIPAA Special Enrollment Rights. HIPAA provides a 30-day special enrollment period when eligible employees or dependents lose eligibility for other group health plan coverage in which they were previously enrolled, and when an eligible employee acquires a dependent through birth, marriage, adoption, or placement for adoption. In addition, HIPAA provides a 60-day special enrollment period if an individual experiences changes in eligibility for state premium assistance under the Children’s Health Insurance Program. Under the applicable guidance, these deadlines are disregarded during, and for 60 days after, the end of the Outbreak Period. This extension applies whether the individual obtains a special enrollment right during the Outbreak Period or before (but where his or her special enrollment period had not expired before March 1, 2020).
For example, an individual who obtains a special enrollment right due to marriage on February 15, 2020, would normally have 30 days (until March 16, 2020) to enroll and/or add their new spouse to their employer’s health plan. Under the new guidance, the Outbreak Period is disregarded, and the individual would have an additional 76 days (i.e., the length of time the individual had to make the election on March 1, 2020, plus an additional 60 days) after the end of the Outbreak Period to make this election change.
- COBRA. Normally, employers must notify the plan administrator of a qualifying event within 30 days of a COBRA qualifying event, such as termination of employment. In addition, individuals generally must notify the plan administrator within 60 days of a determination of disability, or the occurrence of other COBRA qualifying events, such as divorce. The plan administrator must then provide a COBRA election notice within 14 days to the qualifying beneficiary. Qualifying beneficiaries would then have 60 days from receipt of the COBRA election notice to elect COBRA, and an additional 45 days in which to make the first COBRA premium payment. COBRA premium payments would then be due every 30 days. Under the applicable guidance, these deadlines are disregarded during, and for 60 days after, the Outbreak Period. Accordingly, if an individual has a COBRA qualifying event during the outbreak period, the applicable timelines for the employer to notify the plan administrator, the plan administrator to provide a COBRA election notice, and for the participant to elect COBRA or pay the applicable COBRA premiums will not start until 60 days after the end of the Outbreak Period. Similarly, if an individual had a COBRA qualifying event before the Outbreak Period, any COBRA deadlines that occur during the Outbreak Period are disregarded until 60 days after the Outbreak Period. New COBRA notifications forms are now available.
- Claims and Appeal Deadlines. Employee Retirement Income Security Act (ERISA) provides for specific claims procedures and timelines to submit claims and appeals applicable to group health plans and disability plans. Deadlines for individuals to file claims for benefits, for initial disposition of claims, and for providing claimants a reasonable opportunity to appeal adverse benefit determinations under ERISA plans, external review deadlines for non-grandfathered group health plans, and other deadlines that apply for perfecting an incomplete request for review are also disregarded during and for 60 days after the Outbreak Period.
- Other ERISA-Required Notices. Under ERISA, plans and plan fiduciaries are required to furnish certain notices and disclosures to plan participants, such as the Summary Plan Description. The guidance also provides that plans and plan fiduciaries will not be treated as having violated ERISA if they act in good faith and furnish any notices, disclosures, or documents that would otherwise have to be furnished during the outbreak period “as soon as administratively practicable under the circumstances.” Additional EBSA FAQs indicate that the notice's relief for furnishing notices, disclosures, and other documents includes documents requested by participants in writing under 29 U.S.C. § 1024.
- Form 5500s and Form M-1s. In addition, IRS Notice 2020-23 and EBSA Disaster Relief Notice extend the deadlines for Form 5500 and M-1 that would otherwise be due on or after April 1 and before July 15, 2020. The due date is extended to July 15, 2020. These extensions are automatic—no request for extension, form, or letter needs to be filed to take advantage of this relief.
If you have any questions, please reach out to the MMM Employee Benefits & Executive Compensation Team.