October 24, 2021

Volume XI, Number 297


October 22, 2021

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For Whom the Statute Tolls

As discussed in an earlier blog post on the DOL/Treasury relief extending benefit plan deadlines due to the pandemic, plans have to disregard an “outbreak period” when determining deadlines for COBRA elections and premiums payments, special enrollment in health plans, and the filing of claims and appeals. The DOL/Treasury guidance defined the “outbreak period” as the period from March 1, 2020 until 60 days after the COVID-19 National Emergency ends (or such other date as the agencies announce). Recently, the COVID-19 National Emergency was extended at least until April 2021.

The government’s authority for issuing the April 2020 relief is a provision of ERISA (and a similar Internal Revenue Code provision applicable to the IRS), which states that the DOL may “prescribe, by notice or otherwise, a period of up to one year which may be disregarded in determining the date by which any action is required or permitted to be completed.” This rule is clear that disregarding relevant time periods is limited to one year. However, what is not clear is whether the tolling relief expires at the end of this month (i.e., one year from the March 1, 2020 start of the outbreak period), with all tolled periods re-starting for affected individuals, or whether the one year limit is merely a cap to be applied on an individual-by-individual basis.

As an example, assume that an employee lost health coverage in June 2020 and their 60-day COBRA election period normally would have started on July 1, 2020. The question is whether the election period is to begin again on March 1, 2021 (when the one-year relief period expires), or whether the employee is entitled to additional time to elect COBRA because the one-year tolling period would run for one year from the start of the employee’s election period on July 1, 2020. Similarly, if an employee experiences a COBRA qualifying event on or after March 1, 2021, does the tolling relief apply at all?

Although the government is aware of this interpretive question, it appears they are not yet prepared to issue guidance. In the absence of guidance, plan sponsors and administrators will need to determine how to apply the tolling provision. If consideration is being given to continue tolling the deadlines beyond February 28, 2021, insured health plans (and self-insured plans with stop loss coverage) should discuss that approach with their insurance carriers and relevant vendors.

The April 2020 tolling relief also covers the deadline for health plans to provide COBRA election notices to qualified beneficiaries. Given the lack of guidance at this time, the more conservative approach is to operate in compliance with the usual COBRA notification deadlines as of March 1, 2021. To the extent pandemic-related business disruptions continue to make compliance difficult for some plans, the DOL presumably will adhere to its previously stated enforcement approach during the pandemic, which includes relief in appropriate circumstances.

© 2021 Proskauer Rose LLP. National Law Review, Volume XI, Number 43

About this Author

Paul Hamburger Employee Benefits Law Attorney Proskauer Rose Law Firm

Paul M. Hamburger is co-chair of the Employee Benefits & Executive Compensation Group and head of the Washington, DC office. Paul is also a leader of the Practice Center’s health and welfare subgroup and a member of Proskauer’s Health Care Reform Task Force.

Paul provides technical knowledge and advice to employers on all aspects of their employee benefit programs, and advises employee benefit plan trustees and service providers on ERISA and employee benefit plan-related matters. He has extensive experience in negotiating service provider...

Roberta K Chevlowe, Labor, Employment, Attorney, Proskauer, Law Firm
Senior Counsel

Roberta Karen Chevlowe, a Senior Counsel in the Labor & Employment Law Department, practices in the field of employee benefits law. Roberta counsels employers and other benefit plan sponsors with regard to a broad spectrum of issues relating to the establishment, administration and continued legal compliance of all types of employee benefit plans. She advises clients regularly with regard to ERISA’s reporting and disclosure requirements and fiduciary duty provisions; health care reform compliance; COBRA administration; plan qualification issues arising under the Internal Revenue Code;...