December 3, 2021

Volume XI, Number 337

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DOL Issues Clarification for Erisa-Governed Group Health Plans

Two days before the one-year anniversary of the official start of the COVID-19 outbreak, the US Department of Labor (DOL) issued a last-minute notice clarifying its prior guidance that relaxed the deadlines for the Employee Retirement Income Security Act -governed group health and welfare plans (ERISA) related to the Consolidated Omnibus Budget Reconciliation Act (COBRA) and various special enrollment and claims procedures. Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2021-01 (Notice 2021-01) advises that for the deadlines subject to relief under the prior guidance, plans should continue to disregard the outbreak period in calculating timing requirements until the earlier of:

  • One year from the date an individual (emphasis added) was first eligible for relief (March 1, 2020, the first day of the outbreak period, being the first date an individual could be eligible), or

  • 60 days from the announced end of the outbreak period

And, under no circumstances will the disregarded period for any given individual exceed one year. The guidance effectively “tolls” the deadlines on an individualized basis. For example, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, that individual has either until the earlier of March 1, 2022, (one year from the date they were first eligible) or the end of the outbreak period—if that is announced before March 1, 2022.

Notice 2021-01 also suggests plan sponsors send communications to participants whose deadlines are quickly approaching. Plans might want to reissue any pre-pandemic communications sent out that do not accurately reflect the new deadlines to participants. This may help to mitigate the risk of suits by participants for incorrect deadlines.

In conclusion, though Notice 2021-01 provided a needed answer, it clarifies little by imposing unique, individual-specific deadlines. Organizations like the American Benefits Council had advocated setting a clear end to the outbreak period on February 28, 2021, but it became apparent in recent months as the pandemic persisted that it was uncertain how the DOL and US Department of the Treasury would handle setting the one-year limit. This decision, unfortunately, will no doubt lead to confusion among plan sponsors and service providers and increased administrative burdens. Plans should continue to watch for more guidance on this issue.

© 2021 McDermott Will & EmeryNational Law Review, Volume XI, Number 62
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About this Author

Jacob Mattinson Employee Benefits Attorney
Associate

Jacob M. Mattinson focuses his practice on employee benefits and matters related to 401(k), 403(b), pension, executive compensation, health care reform, and cafeteria and welfare plans.

Jacob assists clients in drafting employee benefit plan documents and amendments. He represents clients in matters before the Internal Revenue Service (IRS), US Department of Labor (DOL) and Pension Benefit Guaranty Corporation with respect to plan qualification issues. He also counsels privately and publicly held corporations and tax-exempt entities on a variety of benefits and Employee Retirement...

312-984-3263
Associate

Teal Trujillo focuses her practice on employee benefits and executive compensation matters for public and private companies. She regularly leads due diligence and advises on liability related to retirement plans, health and welfare plans and executive compensation in stock purchase and asset purchase transactions.

A specialist on matters related to tax-qualified pension plans, health and welfare plans and deferred compensation arrangements, Teal also has experience handling correction and administrative matters before the Internal Revenue Service (IRS) and the Department of Labor (...

312-984-6910
Judith Wethall, McDermott Law Firm, Chicago, Labor and Employment Law Attorney
Partner

Judith Wethall focuses her practice on employee benefits, specifically health and welfare programs. She counsels employers, plan administrators, insurers and consultants on a wide range of ERISA compliance issues. Judith's clients include sole proprietors to Fortune 100 companies and cover a variety of industries including health care, technology, manufacturing, insurance and financial.

Judith has extensive experience advising clients on health care law reform; wellness programs; Medicare secondary payor rules; fiduciary compliance; disability...

312-984-7577
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