The federal government is giving employee benefit plan sponsors, plan administrators, and participants more time to meet certain benefit plan deadlines.
On April 28, 2020, the Department of Labor (DOL) announced relief related to the COVID-19 pandemic. Issued jointly with the IRS, the relief extends certain legally mandated timeframes for health coverage election and claims processing, among other things. It also extends deadlines for plan sponsors and administrators to provide certain notices and disclosures. The relief was provided in final regulations as well as a DOL notice and participant FAQs, which you can find here.
Intended to bridge the growing coverage gap caused by rising unemployment, these provisions are in effect for a relief period starting March 1, 2020 and ending 60 days after the announced end of the national emergency (which has yet to be announced). This period is referred to as the “Outbreak Period.”
Employers sponsoring employee benefit plans need to adapt to comply with these new mandatory requirements going forward.how the guidance affects benefit plan deadlines
All plans subject to ERISA and the Internal Revenue Code (IRC) must disregard the Outbreak Period for all plan participants when calculating certain time deadlines, including:
- The date by which participants can file claims or appeals (and any applicable external review) under the plan’s generally applicable claims procedures
- The 30-day period (or 60-day period, in certain instances) to exercise special enrollment rights under HIPAA
- The 60-day period for electing COBRA coverage
- The date by which participants must pay COBRA premiums
- The date by which an individual must notify the plan of a COBRA qualifying event or a Social Security disability determination (used to extend COBRA coverage)
Additionally, plans have additional time to distribute required notices, disclosures, and other documents required by ERISA, such as summary plan descriptions, benefit statements, and annual funding notices.
The guidance states that failure to meet deadlines for distributing these documents will not be treated as an ERISA violation if it occurs during the Outbreak Period as long as plans act in good faith by providing documents as soon as practicable under the circumstances.
Good faith acts include electronic communication with participants through email, text messages and websites with continuous access.
what the new guidance means for employers
Employers must comply with these new guidelines when administering all plans subject to ERISA or the IRC.
Due to the March 1, 2020, retroactive effective date, employers should identify and assist any individuals who may have lost their ability to elect COBRA continuation coverage or file claims or appeals for benefits but are now eligible to make claims for these benefits under the new deadlines.
Going forward, employers and plan administrators should monitor the federal guidance and make sure to adhere to all applicable timelines and any modifications of those timelines.
more regulatory relief on the horizon
The federal government continues to issue and consider several additional items of guidance to provide relief for employee benefit plans. On May 12, 2020, for example, the IRS released updates affecting FSAs, including health FSAs and dependent care FSAs.
Check back at the HealthEquity blog for more information on these and other regulatory updates.
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