Last year the Department of Labor (DOL) and Internal Revenue Service (IRS) announced that during the COVID “Outbreak Period” (the National Emergency period plus 60 days), the following deadlines will be suspended:
The date by which a member would need to:
- File benefit claims
- File appeals and requests for external review
- Request enrollment following a HIPAA Special Enrollment event (birth, adoption, placement for adoption of a child, marriage, loss of other health coverage or eligibility for a state premium assistance subsidy)
- Elect COBRA coverage
- Pay COBRA premiums
- Notify the plan of certain COBRA Qualifying life Events (e.g., divorce or legal separation, a dependent child ceasing to be a dependent under the terms of the plan) or a disability determination
At the time, the DOL and IRS probably did not envision the Outbreak Period lasting as long as it has. Unfortunately, there is a complicating factor that has only recently come into play. ERISA does not allow these types of deadline suspensions to continue for more than 12 months. Since the suspension first took effect March 1, 2020, this 12-month limitation is now relevant. There was some uncertainty how the 12-month limitation would be applied, so the DOL and IRS recently announced that it should be applied on a member-by-member basis. This means that for any given member, for any given deadline, the suspension will continue for no longer than 12 months or until the end of the Outbreak Period, whichever period is shorter.
As a result, some individuals started reaching their one-year maximum suspension period on March 1, 2021. Once their maximum suspension period is reached, individuals must take action to avoid missing their deadlines.
Your clients may want to consider responding to this development by taking certain actions, including alerting their membership to the changes, updating employee facing communications, and updating plan documents.
COBRA Subsidy and new COBRA Election Period
The American Rescue Plan Act (ARPA) was signed into law on March 11, 2021. Under ARPA, individuals and their dependents who are eligible for COBRA or state COBRA (sometimes referred to as state continuation benefits or mini-COBRA), due to involuntary termination or reduction of work hours may be eligible for a 100% COBRA premium subsidy, beginning April 1, 2021 through to September 30, 2021. They may also be eligible for a new COBRA Election period. The DOL will issue a Model Notice mid-April, explaining the subsidy and election period in detail. The Plan Administrator must distribute this notice to impacted individuals.
This information was originally published by Aetna.