Major Employee Benefits Timeframe Extensions Announced for COVID-19 National Emergency
By Brian Gilmore | Published May 1, 2020
Today the Departments of Labor and the Treasury, in consultation the Department of Health and Human Services (collectively, the “Departments”) issued new final rules imposing mandatory timeframe extensions for common employee benefits compliance requirements.
The rules come in response to President Trump’s March 13, 2020 Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, and by separate letter a determination invoking a nationwide national emergency determination under Stafford Act beginning March 1, 2020 as a result of the COVID-19 outbreak (collectively, the “National Emergency”). FEMA has since issued emergency declarations for every state, territory, and possession in the U.S.
In light of the National Emergency, the Departments state that employers, employees, and dependents may have difficulty meeting standard timeframes with respect to HIPAA, COBRA, and claims. The new final rule extends certain of those timeframes to assist employers and employees in the process of maintaining employer-sponsored group health plan coverage.
Timeframe Extensions Disregard the “Outbreak Period”
The extensions of employee and dependent timeframes apply with respect to the period from March 1, 2020 until 60 days after the announced end of the National Emergency period (or a later date announced in subsequent guidance). That period is referred to in the rules as the “Outbreak Period.”
The Departments use April 30, 2020 as the assumed end-date of the National Emergency in all examples. However, the Departments confirm that this date was used simply to make the examples clear and understandable. The assumed April 30 end-date results in an Outbreak Period running from March 1, 2020 through June 29, 2020 (the 60 day after the assumed end of the National Emergency).
Needless to say, the Outbreak Period will extend beyond June 29, 2020 if the National Emergency period extends beyond April 30. Furthermore, the Departments state they will issue additional guidance if there are different Outbreak Periods for different parts of the country.
Eight Extended Timeframes for Employees
1. The HIPAA Special Enrollment Period
Under HIPAA, employees have a 30-day special enrollment period to request enrollment in the health plan upon experiencing the following special enrollment events:
Loss of eligibility for group health coverage or individual health insurance coverage;
Acquisition of a new spouse or dependent by marriage, birth, adoption, or placement for adoption.
Employees have a 60-day special enrollment period to request enrollment in the health plan upon experiencing the following special enrollment events:
Loss of Medicaid/CHIP eligibility;
Becoming eligible for a state premium assistance subsidy under Medicaid/CHIP.
For full details on HIPAA special enrollment periods:
The rules extend the 30-day and 60-day HIPAA special enrollment timeframes by disregarding the Outbreak Period.
Example:
Employee waived coverage under the health plan.
On March 31, 2020, employee gives birth and would like to enroll herself and her newborn.
Result:
The standard 30-day special enrollment period is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee would have until 30 days after the end of the Outbreak Period (until July 29, 2020) to enroll herself and her child in the plan.
2. The COBRA Election Period
Under COBRA, employees and dependents who lose active coverage as a result of a qualifying event (e.g., termination of employment, reduction of hours) have 60 days to elect continuation coverage from receiving the COBRA election notice.
For full details on COBRA elections:
The rules extend the 60-day COBRA election period by disregarding the Outbreak Period.
Example:
Employee’s hours are reduced causing the employee to lose active coverage under the health plan, which is a COBRA qualifying event.
Employee receives the COBRA election notice on April 1, 2020.
Result:
The standard 60-day COBRA election period is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee would have until 60 days after the end of the Outbreak Period (until August 28, 2020) to elect COBRA.
3. The COBRA Premium Payment Period
Under COBRA, qualified beneficiaries have 45 days from the COBRA election to make the first premium payment, and subsequent monthly payments must be made by the end of the 30-day grace period that starts at the beginning of each coverage month.
For full details on COBRA premium payments:
The rules extend the 45-day initial premium payment and 30-day grace period for subsequent premium payment timeframes by disregarding the Outbreak Period.
Example:
Employee is a COBRA qualified beneficiary who fails to make timely COBRA premium payments by the end of the 30-day grace period for March, April, May, and June.
Result:
The standard 30-day COBRA premium payment grace period is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee would have until 30 days after the end of the Outbreak Period (until July, 2020) to make the COBRA premium payment for the months of March, April, May, and June.
The employee is eligible to receive coverage under the plan during this interim period, even though some or all premium payments may not be received until July 29, 2020.
If the employee makes a premium payment for only two months of coverage by July 29, 2020, those premiums would apply to the first two months that remained unpaid (March and April), and there would be no COBRA coverage for any month after April 2020.
4. COBRA Notices from Employees re Divorce/Legal Separation, Child Reaching Age 26, and Disability
Under COBRA, the employee or dependent is responsible for notifying the plan within 60 days of the following qualifying events:
A divorce or legal separation causing the spouse to lose plan eligibility;
A child losing eligible dependent status (typically upon reaching age 26).
For a COBRA qualified beneficiary to qualify for a disability extension of the maximum coverage period from 18 to 29 months, the qualified beneficiary must (among additional requirements) notify the plan within 60 days of the SSA disability determination.
Failure to timely notify the plan of these events can cause the employee or dependent to lose COBRA rights under the plan.
For full details on these employee COBRA notification requirements:
The rules extend the 60-day employee COBRA notification timeframes by disregarding the Outbreak Period.
Example:
Employee and spouse are covered under the employer-sponsored group health plan.
Employee and spouse finalize their divorce effective April 1, 2020, causing the spouse to lose eligibility for coverage.
Result:
The 60-day period for the employee/spouse to notify the plan of the divorce to preserve the former spouse’s COBRA rights is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee/spouse would have until 60 days after the end of the Outbreak Period (until August 28, 2020) to notify the plan of the divorce qualifying event and preserve COBRA rights for the former spouse.
5. The Plan’s Benefit Claim Filing Deadline
The rules extend the plan’s deadline to file a benefit claim under the plan’s claims procedures by disregarding the Outbreak Period.
Example:
Employee is covered by the employer-sponsored group health plan, which by its terms requires that benefit claims be submitted within 365 days of any covered item or service.
Employee receives covered medical treatment on March 1, 2020, but does not submit the benefit claim to the plan until April 1, 2021.
Result:
The plan’s standard 365-day benefit claim filing deadline is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee’s last day to file the benefit claim is 365 days after the end of the Outbreak Period (by June 29, 2021), so the claim is therefore timely submitted.
6. The ERISA Adverse Benefit Determination Appeal Deadline
ERISA sets forth a complex scheme of specific deadlines for appeals in its claims and appeals procedures rules. Among these deadlines is the 180-day timeframe to appeal an adverse benefit determination under a group health plan or disability plan, and the 60-day timeframe to appeal an adverse benefit determination under any other type of plan.
The rules extend the claimant’s deadline to file an appeal of the plan’s adverse benefit determination by disregarding the Outbreak Period.
Example:
Employee receives notification of an adverse benefit determination from the employer-sponsored disability plan on January 28, 2020.
Result:
The 180-day period for the employee to file an appeal of the adverse benefit determination is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
Therefore, the employee’s last day to submit an appeal is 148 days (180 – 32 days following January 28 to March 1) after June 29, 2020, which is November 24, 2020.
7. The ERISA External Review Request Deadline
Under the ERISA appeals procedures for non-grandfathered health plans, claimants have four months after the date of receipt of an adverse benefit determination or final adverse benefit determination to request an external review if the claim involves medical judgment or rescission of coverage.
For full details on grandfathered plan status:
The rules extend the claimant’s deadline to file an external review request by disregarding the Outbreak Period.
Example:
Employee receives an adverse benefit determination involving medical judgment from the employer-sponsored group health plan on April 1, 2020.
Result:
The four-month period for the employee to file an external review request is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee will have until four months from the end of the Outbreak Period (by October 29, 2020) to file the external review request.
8. The Deadline to Submit Additional Information Related to External Review Request
Upon a finding that a claimant’s external review request was not complete, the claimant has until the end of the four-month filing period (or, if later, 48 hours following receipt of notification of an incomplete request) to perfect the request for external review by submitting additional information.
The rules extend the period to submit additional information related to the external review request by disregarding the Outbreak Period.
Example:
Employee receives an adverse benefit determination involving medical judgment from the employer-sponsored group health plan on April 1, 2020.
Employee submits request for external review on April 15, 2020.
On April 20, 2020, the plan notifies the employee that after completion of the preliminary review of the request, the plan has determined that the request is not complete.
Result:
The four-month period (or, if later, 48-hour period) for the employee to perfect an external review request by submitting additional information is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The employee will have until four months from the end of the Outbreak Period (by October 29, 2020) to perfect the external review request by submitting additional information.
One Extended Timeframe for Employers
9. The COBRA Election Notice Deadline
Under COBRA, employers (group health plans) generally must provide a COBRA election notice to individuals who experience a qualifying event within 44 days from the loss of coverage.
These rules generally provide 30 days for the employer to provide notice to the plan administrator, and 14 days for the plan administrator to provide the election notice to the qualified beneficiary, which the DOL generally enforces as a combined 44-day limit.
For full details on the COBRA election notice timeframe:
The rules extend the deadline for the plan to provide the COBRA election notice to the qualified beneficiary by disregarding the Outbreak Period.
Example:
Employee loses coverage under the employer-sponsored group health plan as a result of termination of employment as April 1, 2020.
Result:
The 44-day period to provide the employee with the COBRA election notice is extended by disregarding the Outbreak Period.
Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
The plan will have until 44 days after the end of the Outbreak Period (by August 12, 2020) to provide the COBRA election notice.
Additional Timeframe Extensions in the Future?
The rules state that the Departments will continue to monitor the effects of the COVID-19 pandemic and may provide additional relief in the future as they deem warranted.
Brian Gilmore
Lead Benefits Counsel, VP, Newfront
Brian Gilmore is the Lead Benefits Counsel at Newfront. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law.
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