On May 4, 2020, the federal government published new regulations that extend many deadlines applicable to group health plans, disability and other welfare plans, pension plans, and their participants and beneficiaries under the Internal Revenue Code and Employee Retirement Income Security Act (ERISA). Here are answers to the questions that likely are top of mind for you, but please know that many unanswered questions still exist.
Q1. Which deadlines are extended?
A. The new regulations include participants’ deadlines to:
The new regulations also delay the plan administrator’s deadline to provide COBRA election notices to COBRA qualified beneficiaries, but as a practical matter many employers are continuing to provide COBRA election notices using their regular timeframes.
Q2. For how long are the deadlines extended?
A. The deadlines listed above are extended for the period beginning March 1, 2020 and ending 60 days after the announced end of the COVID-19 national emergency. This period is referred to in federal guidance as the “Outbreak Period.” Obviously, the longer the Outbreak Period, the longer these deadlines are extended. Once the Outbreak Period ends, the normal deadlines will apply but will be measured from the last day of the Outbreak Period.
Q3. If an employee elects COBRA but does not pay their premiums under the “normal” COBRA premium deadlines, what happens to their coverage if the premium deadlines are extended?
A. At this time, the answer largely will depend on how carriers, third-party administrators (TPAs), and vendors decide to handle these deadline extensions. Here are three potential options with our comments:
Q4. Do these deadline extensions apply to state benefit continuation laws?
A. No. Employers who only are subject to state continuation, e.g. employers with less than 20 employees and churches with fully insured plans, can still enforce participant deadlines under state benefit continuation laws.
Q5. Do these deadline extensions apply to governmental plans (e.g., cities, counties, school districts)?
A. The U.S. Department of Health and Human Services, which technically oversees non-federal governmental plans, encourages governmental plans to comply. Therefore, we think governmental plans should comply unless their legal counsel advises otherwise.
Q6. Do employers have to tell their employees about these extended deadlines?
A. We think the best answer is yes, although the federal guidance does not specifically address the question. Under ERISA’s general fiduciary rules and summary plan description (SPD) rules, we think the most compliant approach is to communicate these changes to plan participants.
Q7. I heard the Department of Labor (DOL) issued new model COBRA notices on May 1st. Do the new model COBRA notices include these extended deadlines?
A. No. The new model COBRA notices do not mention the extended COBRA deadlines. The DOL made minor modifications to the model COBRA notices to clarify the interaction of COBRA and Medicare.
Q8. What about deadline extensions for producing SPDs and similar benefit plan notices?
A. Benefit plans subject to ERISA also have extended deadlines for producing SPDs and other ERISA-required benefit plan notices and disclosures for the duration of the Outbreak Period, but only as long as the plan administrator makes good faith efforts to furnish the notices and disclosures, including by electronic means if possible. In other words, benefits plans do not have “carte blanche” to wait until the end of the Outbreak Period to furnish ERISA-required notices and disclosures, but will not be held to strict deadlines if they make good faith efforts to make the required notices and disclosures available to plan participants.
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