Last week, we published an eAlert titled, “Benefit Plan ‘Outbreak Period’ Set to Expire at the End of February – Maybe?” that said the benefit plan “Outbreak Period” was maybe set to expire on February 28, 2021, depending on how a one-year limit on deadline suspensions under the Employee Retirement Income Security Act (ERISA) and the federal tax code (the “Code”) is interpreted. We mentioned that it would be nice if the government released guidance on the issue. In a classic case of “ask and you shall receive,” on Friday, February 26, 2021, the Department of Labor (DOL) issued that guidance in Disaster Relief Notice 2021-01 (the “Notice”).
The Outbreak Period began on March 1, 2020. The Notice states that individuals and plans with deadlines suspended during the Outbreak Period will have such deadlines disregarded until the earlier of: (a) one year from the date they were first eligible for relief; or (b) 60 days after the announced end of the presidential COVID-19 national emergency (the end of the Outbreak Period). On the applicable date, the deadlines for individuals and plans that were previously suspended will resume, and in no case will a suspended period exceed one year.
Essentially, this means that employers must apply the one-year limit on an individual-by-individual basis. The following examples illustrate this point:
- Nick received a COBRA election notice on February 1, 2020. Nick’s COBRA election window was suspended on March 1, 2020, when the Outbreak Period began. Nick has until April 1, 2021, one year from the date he would have had to make the election if not for the Outbreak Period relief.
- Greg’s monthly COBRA premium payment was due April 1, 2020. Normally, his employer’s plan has a 30-day grace period to pay COBRA premiums. Greg’s April 2020 COBRA premium is due by April 30, 2021, one year from the date his April 2020 COBRA premium would have been due if not for the Outbreak Period relief.
- Deonna’s employer’s health FSA plan requires participants to file claims for reimbursements for the 2019 plan year by March 31, 2020. Deonna’s timeframe to submit a 2019 reimbursement claim under her employer’s health FSA plan was suspended on March 1, 2020, when the Outbreak Period began. Deonna has until March 31, 2021, to submit claims for reimbursement for the 2019 plan year, one year from the date her 2019 reimbursement claims would have been due if not for the Outbreak Period relief.
- Sonia had a baby on March 15, 2021. Normally, her employer’s plan requires her to enroll her baby within 31 days after the birth. Sonia’s 31-day window is suspended until the earlier of: (a) one year; or (b) 60 days after the announced end of the presidential COVID-19 national emergency. This means Sonia’s deadline to enroll her new baby could be as late as April 15, 2022 (i.e., one year from the normal due date to enroll her baby), but the deadline could also be earlier if the end of the presidential COVID-19 national emergency is announced before then (see example below).
- Same facts as No. 4, above, but assume instead that, hypothetically, President Joe Biden announces that the COVID-19 national emergency ends on July 1, 2021. Sonia’s 31-day window to enroll her baby in her employer’s plan is suspended until August 29, 2021 (i.e., 60 days after the announced end of the presidential COVID-19 national emergency). This means Sonia’s new deadline to enroll her baby is September 29, 2021.
Importantly, the Notice emphasizes that plan fiduciaries should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames. The Notice further emphasizes that if an employer or other plan fiduciary knows, or should reasonably know, that an individual’s one-year suspension limit is approaching with respect to a particular deadline, the employer or other plan fiduciary should send the individual a notice alerting the individual that their suspension period is ending. With that in mind, employers should identify specific individuals whose original deadlines for the following events would have otherwise fallen during the Outbreak Period:
- COBRA election deadlines.
- COBRA premium due dates.
- HIPAA special enrollment deadlines.
- Deadlines to file claims, appeals and requests for external review (remember this applies to retirement plan appeals, too).
Employers should have a process to track the one-year limit applicable to each specific individual, and prepare notices and communications 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.
