Federal Agencies Clarify Extension of Welfare Benefit Plan Deadlines

Last year, the U.S. Department of Labor (“DOL”) and IRS issued guidance providing that group health plans and certain other benefit plans must disregard the period beginning March 1, 2020 and ending 60 days after the announced end of the COVID-19 national emergency (the "Outbreak Period") for purposes of applying various deadlines under COBRA, ERISA, and HIPAA’s special enrollment provisions. These deadline extensions are discussed in our prior blog article.

In issuing these extensions, the agencies relied on statutes that allow them to disregard periods for a maximum of one year. Therefore, questions arose as to whether the Outbreak Period was required to end on February 28, 2021 (one year after it began).

The DOL provided the answers to these questions in EBSA Disaster Relief Notice 2021-01 (the "Notice"). The Notice clarifies that the extensions will continue past February 28, 2021 and will be measured on a case-by-case basis. Specifically, a deadline that falls within the Outbreak Period will be extended until the earlier of: (1) one year from the date the plan or individual was first eligible for Outbreak Period relief, or (2) the end of the Outbreak Period (which remains ongoing).  

The Notice provides the following examples:

• Example 1: If  a  qualified  beneficiary  would  have  been  required  to  make  a  COBRA  election  by  March  1,  2020,  the  Notice  delays  that  requirement  until  February  28,  2021,  which  is  the  earlier  of  one  year  from March  1,  2020  or  the  end  of  the  Outbreak  Period. 
• Example 2: If a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the Notice delays that election requirement until the earlier of 1 year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.   
• Example 3: Likewise,  if  a  plan  would  have  been  required  to  furnish  a  notice  or  disclosure  by  March  1,  2020,  the  relief  under  the  Notice  would  end  with  respect  to  that  notice  or  disclosure  on  February  28,  2021.  The  responsible  plan  fiduciary  would  be  required  to  ensure  that  the  notice or disclosure was furnished on or before March 1, 2021.

The Notice suggests that plan fiduciaries should make reasonable accommodations to prevent the loss or undue delay in payment of benefits and should try to minimize the possibility of individuals losing benefits due to a failure to comply with pre-established timeframes. If a plan administrator knows, or should reasonably know, that the end of the relief period for an individual action is exposing a participant or beneficiary to the risk of losing protections or benefits, the administrator should consider sending a notice regarding the end of the relief period.

Please contact one of the authors of this article if you have any questions.

• Amanda J. Dernovshek...517.371.8259...adernovshek@fosterswift.com
• Julie L. Hamlet...616.796.2515...jhamlet@fosterswift.com
• Mindi M. Johnson...616.726.2252...mjohnson@fosterswift.com