I’m Just Waiting on an… End to the Extended ERISA Deadline Periods

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by Brenda Berg

Early in the pandemic, the IRS and DOL issued a temporary rule (published May 4, 2020) extending certain deadlines applicable to retirement plans and health and welfare plans. (See Deadlines and Commitments: DOL and IRS Temporary Rule for COVID for more information about that extension.) Under that temporary rule, the deadlines were generally extended until 60 days after the announced end of the National Emergency due to COVID-19, which was referred to as the “Outbreak Period.” The deadlines are essentially “tolled” during the Outbreak Period. The National Emergency began on March 1, 2020, as declared by President Trump’s Proclamation.

The examples in the temporary rule assumed an end date of April 30, 2020 for the National Emergency, which would have extended the Outbreak Period through June 29, 2020. As we all now know, this National Emergency did not end on April 30, and in fact it is still in place. So we are still waiting for the National Emergency period to end and trigger the normal deadlines.

As the crisis has extended, the impact of the “temporary rule” is becoming more of an issue. While these extended deadlines offer major relief to employees and to employers in some cases, they also impose burdens. To put a finer point on some of what they mean for employers:

  • An employee who terminated employment back in March can still be thinking about whether to elect COBRA that would cover that entire time period to date. The employee has until 60 days after the end of the Outbreak Period to make her election. Although she would have to pay premiums for that period, this gives her a long period of time to “wait and see” whether she has any expenses during the period. The risk of adverse selection may weigh on employer plans, particularly self-funded plans. If Congress and the President were to pass legislation including a COBRA subsidy (which seems unlikely at this point), these retroactive elections would probably increase.
  • An employee who had a baby in April but didn’t add the baby to coverage under HPIAA special enrollment rules can also play the waiting game when deciding whether to enroll. The HIPAA special enrollment deadline for retroactive enrollment would normally end 30 days after birth, but now the employee has until 30 days after the end of the Outbreak Period.
  • An employee who had medical claims during this Outbreak Period will have the Outbreak Period disregarded for the claims filing deadline. For example, if the employer’s health flexible spending account deadline for submitting claims for 2020 is three months following the end of the calendar year/plan year of 2020, that three months won’t start to run until the end of the Outbreak Period.

Separately, the HHS recently renewed its determination that a public health emergency exists as a result of the pandemic, effective October 23, 2020 and in place for 90 days unless the HHS determines earlier that a public health emergency no longer exists. This extends the requirements for group health plans to cover certain COVID-related diagnostic and preventive health services without cost-sharing. The public health emergency for this rule has been in place since January 27, 2020.

Plan sponsors are now confronted with whether to update their 2021 documents and open enrollment materials with these extensions and changes. They also need to think about whether to issue Summaries of Material Modification on the health coverage changes and other COVID changes (such as coronavirus-related distributions from retirement plans) that will generally be due next July; many might want to send these with current open enrollment materials in order to avoid confusing participants by sending them next year when some of these provisions will have already expired!