Employers may be well aware of the current extension on certain benefit plan deadlines during the “Outbreak Period.” However, they may find it surprising to learn that those deadlines are maybe set to expire on February 28, 2021, absent action from the government.
To briefly recap, in response to the COVID-19 pandemic, the Department of Labor and Department of Treasury issued rules last spring (“Agency Guidance”) that extended certain timeframes under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (“Code”) which applied to benefit plans during the COVID-19 presidential national emergency. The extensions include the delay or suspension of certain COBRA, HIPAA special enrollment, and claims and appeals filing procedure deadlines. The Agency Guidance paused these deadlines during a period called the "Outbreak Period" — beginning on March 1, 2020 (the start of the presidential national emergency), and ending 60 days after the end of the presidential national emergency is announced. For example, if an employee was provided a COBRA election notice on June 1, 2020, the employee would normally have 60 days to return their COBRA election form. However, under the Agency Guidance, the employee would not need to return the COBRA election form until 60 days after the end of the Outbreak Period.
The benefit plan deadline extensions under the Agency Guidance are explicitly allowed pursuant to ERISA and the Code. However, these ERISA and Code provisions also limit all deadline extensions to a maximum period of one year. What’s unclear is whether the one-year limit is a hard limit that applies to all deadlines that would have otherwise fallen within the Outbreak Period, or whether the one-year limit is applied on an individual-by-individual basis. Continuing the COBRA example from above, would the employee’s 60-day deadline to return their COBRA election form begin to run on March 1, 2021? Or would it begin to run on June 1, 2021? Clarification from the government would be much appreciated, but, unfortunately, there has not been any indication that clarifying guidance is imminent.
Recommendations for Employers
The Agency Guidance provided many benefit plan administrative challenges to employers, and it looks like employers are now faced with additional administrative challenges as the one-year anniversary of the presidential COVID-19 national emergency approaches. It’s possible that Congress, the President, or the enacting agencies could step in and remedy the situation, but until then, we think a reasonable, good-faith approach would be for employers to prepare for the Outbreak Period to expire on February 28, 2021, for all events that occurred during the Outbreak Period. Employers should take stock of all benefit plan deadlines that were impacted by this extension and determine the new deadlines for affected events. Employers should prepare notices and communications to employees and participants with the new, upcoming deadlines. If you need assistance determining the new deadlines or with preparing employee communications, please contact Stephanie Grant, Brianna Richardson or another member of Warner’s Employee Benefits/Executive Compensation Practice Group.
