November 28, 2021

Volume XI, Number 332

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Employee Benefit Plan COVID-19 Deadline Extensions May Expire as Early as February 28

Employers are facing uncertainty as to the expiration of the COVID-19 relief the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) issued in a joint guidance on May 4, 2020.

The joint guidance requires employee benefit plans to toll, or suspend, certain deadlines during the “Outbreak Period,” which the guidance defines as the period beginning on March 1, 2020, and ending on the date that is “60 days after the announced end of the National Emergency or such other date announced by the [departments].” As noted in the joint guidance, the DOL’s and IRS’s statutory authority permits only a one-year extension of these deadlines.

The deadlines that are subject to the suspension or extension during the Outbreak Period include the following:

  • The period within which special enrollment in the employer’s group health plan must be requested (for example, the deadline to enroll a new spouse or child);

  • Deadlines related to continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), including the 60-day election period, the timing of payments for COBRA continuation coverage, and the period within which individuals must notify the plan of a second COBRA qualifying event or determination of disability;

  • The date by “which individuals may file a benefit claim under the plan’s claims procedure” (often 365 days from the date the claim was incurred);

  • The date by which claimants may file an appeal of a denied claim under the plan’s claims procedure (often 180 days from the date they receive notice of claim denial);

  • The four-month period within which claimants in a non-grandfathered group health plan “may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination”; and

  • The date by which a claimant in a non-grandfathered group health plan “may file information to perfect a request for external review upon a finding that the request was not complete” (the later of the original four-month period or 48 hours after receiving notice of the incomplete filing).

Because the national emergency has not ended and neither the DOL nor IRS has weighed in regarding the expiration of the relief provided in the joint guidance, employers are left without official guidance on administration of their benefit plans with respect to the deadlines outlined above.

Employers could take one of two approaches in determining how the expiration of the relief in the joint guidance impacts the above deadlines:

Approach One

The Outbreak Period expires on February 28, 2021, for all of the deadlines listed above, and the clock on those deadlines begins to run again on March 1, 2021. Here is an example:

  1. June 1, 2020: The participant gave birth.

  2. July 1, 2020: This is the normal deadline by which the participant must request enrollment for the child in the participant’s group health plan.

  3. Because the participant gave birth during the Outbreak Period, her special enrollment period under the Health Insurance Portability and Accountability Act (HIPAA) is tolled until the March 1, 2021, expiration of the regulatory relief.

  4. March 1, 2021: On this date, the participant’s HIPAA special enrollment period begins.

  5. March 31, 2021: This is the participant’s last day to enroll her child in the plan. The enrollment would be effective retroactively back to June 1, 2020, assuming all required premiums are paid.*

*If a participant takes advantage of the deadline extension and enrolls a child after the normal 30-day deadline, there may be multiple months of premiums to be paid shortly after the end of the Outbreak Period. Participants may not be able to make such payments, but it is not clear that they would be granted further extensions to pay the make-up payments (particularly with respect to insured benefits). The same issue arises with respect to make-up COBRA premium payments. Guidance from the DOL and IRS in this regard would be welcome.

Note that “clocks” that were running on March 1, 2020, would not reset to 0 on March 1, 2021, but would simply restart on that date. For example, if a participant gave birth on February 15, 2020, (meaning 14 days ran off the clock before March 1, 2020), the participant would only have 16 days, beginning on March 1, 2021, to enroll her child in the plan under the first approach.

Approach Two

The one-year limitation in the joint guidance applies to each deadline separately (i.e., on a case-by-case basis). This interpretation leads to a different result:

  1. June 1, 2020: The participant gave birth.

  2. July 1, 2020: This is the normal deadline by which a participant must request enrollment for a child in the participant’s group health plan.

  3. Unless the president or the IRS and the DOL announce an earlier end to the Outbreak Period, the participant’s HIPAA special enrollment period is tolled for one year, until June 1, 2021.

  4. June 1, 2021: This is the date on which the participant’s HIPAA special enrollment period begins.

  5. July 1, 2021: This is the participant’s last day to enroll her child in the plan. The enrollment would be effective retroactively back to June 1, 2020, assuming all required premiums are paid.

During an informal conversation, one IRS agent indicated that there was the possibility of a 60-day “pad” after March 1, 2021, which would essentially toll the above deadlines by another 60 days after March 1, 2021. Although the Internal Revenue Code contains a possible statutory justification for this position for the IRS, there is no similar provision in the Employee Retirement Income Security Act (ERISA) for the DOL. It is possible that the above issues will be addressed in an updated joint guidance from the IRS and the DOL.

Next Steps

Employers will want to consider how to proceed with respect to these deadlines, particularly if there is no intervening guidance from the departments. The more conservative approach may be for employers to operate their benefit plans as if the clock on the deadlines set forth above restarts on March 1, 2021. Employers may also want to consider distributing communications targeted to participants who are affected by the expiration of the deadline extensions.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume XI, Number 56
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About this Author

Ruth Anne Collins Michels, Ogletree Deakins Law Firm, Atlanta, Labor and Employment, Healthcare Attorney
Shareholder

Ms. Michels practices exclusively in the area of employee benefits law. She represents clients in the areas of qualified retirement plans, health and welfare plans, fiduciary compliance best practices, nonqualified deferred compensation plans, ERISA compliance, COBRA administration, HIPAA privacy regulations, and compliance with other federal laws relating to employee benefits matters, including the Affordable Care Act.

Prior to joining Ogletree, Ms. Michels worked at Air Quality Sciences, Inc. in employee benefits and as a manager of their...

404-870-1725
Christopher C. Guthrie, Ogletree Deakins Law Firm, Atlanta, Labor and Employment Law Attorney
Associate

Mr. Guthrie joined Ogletree in 2017 as an Associate in the Employee Benefits Practice Group.  He focuses his practice on qualified and non-qualified retirement plans, ERISA compliance, executive compensation arrangements, health and welfare plans, and taxation.

While in law school, Mr. Guthrie served as President of the GSU Moot Court Board for the 2016 – 2017 academic year and was a student advocate in the Philip C. Cook Low-Income Taxpayer Clinic, where he received the Ginny and Kelly Smith Tax Clinic Fellowship for three semesters and the J.B...

404-260-1475
Associate

Hillary Sizer joined Ogletree Deakins’ Chicago office as an associate in 2019. She assists clients with ERISA compliance matters, focusing on health and welfare plans. She graduated in 2019, with distinction, from Georgetown University Law Center where she earned a Master of Laws in Taxation and an Employee Benefits Certificate. She is a 2018 graduate of the Lewis & Clark Law School in Portland, Oregon. While there, she spent a summer externing for the Oregon Tax Court. She received a BA in Philosophy, cum laude...

312-558-3147
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