Deadlines and Commitments: DOL and IRS Temporary Rule for COVID

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by Lyn Domenick and Bret Busacker

The US Department of Labor and Internal Revenue Service published temporary rules that extend certain deadlines under ERISA and the Internal Revenue Code applicable to retirement plans, group health plans, and other welfare plans during the COVID-19 national emergency period.  We focus here on the group health plan deadlines including those related to COBRA, Special Enrollment and ERISA claims procedures. This guidance which became effective May 4, 2020 may be reviewed here.

The temporary rule requires all self-funded and insured ERISA group health plans to disregard what is defined as the “Outbreak Period” in measuring notice and election deadlines.  The “Outbreak Period” is the period from March 1, 2020, until 60 days after the announced end of the COVID-19 national emergency under the Stafford Act (or such other date announced in a future notice).  Governmental group health plans are encouraged, but not required, to adopt the temporary rule.

The temporary rule provides that the Outbreak Period is disregarded for purposes of calculating the following deadlines:

  • The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA as a result of marriage, birth, adoption or loss of other health plan coverage
  • The 60-day election period for COBRA continuation coverage
  • The date for making COBRA premium payments
  • The date for individuals to notify the plan of a qualifying event or determination of disability under COBRA
  • The date within which individuals may file a benefit claim under the plan’s claims procedures
  • The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure
  • 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
  • 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
  • With respect to group health plans, and their sponsors and administrators, the date for providing a COBRA election notice

Example:

For example, if a participant becomes eligible for COBRA on May 1, 2020 (during the Outbreak Period) and the national emergency ends on June 30, 2020, the Outbreak Period would end on August 28, 2020 and the participant would have until October 27, 2020 to elect COBRA, (i.e., the regular 60 day COBRA election period begins at the end of the Outbreak Period).  Such COBRA coverage will be retroactive to the date of the participant’s loss of coverage.

If a deadline had already started to run prior to the beginning of the Outbreak Period then the number of days it has already run prior to the Outbreak Period will be considered when determining the deadline, but the Outbreak Period will be disregarded.   

There is no requirement to update a plan’s Summary Plan Description or issue a Summary of Material Modifications because plan amendments are not required to implement the temporary rule.  However, plan sponsors may wish to communicate these changes to their employees in order to inform them of their rights.  Plan sponsors should also consult with their providers who are charged with administering COBRA, claims procedures and other notices to ensure they are taking steps to comply with this guidance.  Further DOL and IRS guidance may be forthcoming as the COVID-19 pandemic progresses.  Stay tuned.