Benefit Plan Timeframe Extensions
On May 4, 2020, it was announced by the U.S. Department of Labor and the U.S. Department of the Treasury that due to the COVID-19 national emergency, a Final Rule has been issued under which certain timeframes have been extended as required under ERISA and the IRS. These extensions have been put in place to assist group health plans and other benefits plans to comply with ERISA and IRS requirements, and also to help plan participants in exercising their health plan rights.
The actual date the compliance timeframe resumes will depend on the date the National Emergency is declared to be over by the Federal Government. As of this writing, that closure date has not yet been determined.
If the National Emergency ends on…
…then the 60-day extension will end on…
June 30, 2020
August 29, 2020
October 15, 2020
December 14, 2020
After the 60-day extension expires, the normal compliance timeframe will start.
The time-frames for the following plan conditions are extended by this Final Rule, and the time included in the Emergency Outbreak Period must be disregarded when calculating the due dates for each of the following sections.
The examples we have included at the end of each section have been modified from those provided by the Department of Labor and the Treasury Department to help illustrate the timeframe extensions required by the Final Rule. For purposes of the examples, they use a hypothetical end date for the COVID-19 National Emergency of April 30, 2020, and the Outbreak Period ending on June 29, 2020 (the 60th day after the hypothetical end of the national emergency). These dates are not the actual national emergency end date or outbreak period end dates:
HIPAA Special Enrollment Periods
Group health plans are required to offer special enrollment periods when an employee, spouse, or dependent experiences a qualifying life event change, such as the birth or adoption of a child, marriage or divorce, or loss of coverage from another provider due to job loss or reduction of hours below the enrollment threshold. In most cases, individuals have 30 days from the date of the event to enroll in a group health plan if they are otherwise eligible for coverage. (NOTE: there is a 60-day window for loss of Medicaid or State Children’s Health Insurance Program coverage or subsidies). The dates for the special enrollment periods are extended under these new rules.
Benefit Plan Example A – Special enrollment period
Anna was eligible for her employer-sponsored group health plan but previously declined participation in the plan. On March 31, 2020, Anna gave birth to twins and would like to enroll herself and the children into her employer’s plan; however, the plan open enrollment does not begin until November 15. When may Anna exercise her special enrollment rights?
Conclusion: In this example, the Outbreak Period is not counted for purposes of determining Anna’s special enrollment period. Anna and her children qualify for special enrollment into her employer’s plan as early as the date of the children’s birth. Anna may exercise her special enrollment rights for herself and her children into her employer’s plan until 30 days after June 29, 2020, which is July 29, 2020, if she pays the premiums for any period of coverage.
Employees or qualified beneficiaries generally have a 60-day timeline for electing COBRA coverage, and an additional 45 days for making the first premium payment, for a potential total of 105 days from the initial loss of coverage. Additionally, qualified beneficiaries are required to notify their COBRA administrator of the determination of a disability. Each of these deadlines for notifying COBRA administrators, electing coverage, and making the initial or monthly premium payments is extended under these new rules.
Benefit Plan Example B – Electing COBRA
Bobby works for XYZ Corp. and participates in XYZ’s group health plan. Due to the National Emergency, Bobby experiences a qualifying event for COBRA purposes because of a reduction of work hours below the hours necessary to meet the group health plan’s eligibility requirements and has no other coverage. Bobby is provided a COBRA election notice on April 1, 2020. What is the deadline for Bobby to elect COBRA?
Conclusion: Bobby is eligible to elect COBRA coverage under XYZ’s plan. The Outbreak Period is not counted for purposes of determining Bobby’s COBRA election period. The last day of Bobby’s COBRA election period is 60 days after June 29, 2020, which is August 28, 2020.
Example C – COBRA premium payments
On March 1, 2020, Chris was receiving COBRA continuation coverage under a group health plan. More than 45 days had passed since Chris had elected COBRA. Monthly premium payments are due by the first of the month. The plan does not permit qualified beneficiaries more time than the statutory 30-day grace period for making premium payments. Chris made a timely February payment, but did not make the March payment or any subsequent payments during the Outbreak Period. As of July 1, Chris has made no premium payments for March, April, May, or June. Does Chris lose COBRA coverage, and if so for which months?
Conclusion: In this example, the Outbreak Period is not counted for purposes of determining whether monthly COBRA premium installment payments are timely. Premium payments made by 30 days after June 29, 2020, which is July 29, 2020, for March, April, May, and June 2020, are timely, and Chris is entitled to COBRA continuation coverage for these months if she makes payment on time. Under the terms of the COBRA statute, premium payments are timely if made within 30 days from the date they are first due. Accordingly, premium payments for four months (March, April, May, and June) are all due by July 29, 2020. Chris is eligible to receive coverage under the terms of the plan during this interim period even though some or all of Chris’s premium payments may not be received until July 29, 2020. Since the due dates for Chris’s premiums would be postponed and Chris’s payment for premiums would be retroactive during the initial COBRA election period, Chris’s insurer or plan may not deny coverage, and may make retroactive payments for benefits and services received by the participant during this time.
Filing or Appealing a Benefits Claim
ERISA requires that benefits plans, and group health plans have in place a process by which plan participants may file a claim and/or appeal an unfavorable determination of the claim filing. Typically, these plans allow 180 days for appealing a group health plan denial, and 60 days for appealing a pension or welfare benefit denial. Additionally, group health plans and benefits plans are required to offer an external third-party claim review process in addition to their own internal process, and these external reviews are permitted up to four months after the initial appeal is denied. Each of these filing and internal or external appeal dates are extended as described above.
Example D – Claims for medical treatment under a group health plan
Darren is a participant in a group health plan. On March 1, 2020, Darren received medical treatment for a condition covered under the plan, but a claim relating to the medical treatment was not submitted until April 1, 2021. Under the plan, claims must be submitted within 365 days of the participant’s receipt of the medical treatment. Was Darren’s claim timely?
Conclusion: Yes. For purposes of determining the 365-day period applicable to Darren’s claim, the Outbreak Period is not counted in the calculation. Therefore, Darren’s last day to submit a claim is 365 days after June 29, 2020, which is June 29, 2021, so Darren’s claim was considered timely.
Example E – Internal appeal, disability plan
Eliza received a notification of an adverse benefit determination from Eliza’s disability plan on January 28, 2020. The notification advised Eliza that there are 180 days within which to file an appeal. What is Eliza’s appeal deadline?
Conclusion: When determining the 180-day period in which Eliza’s appeal must be filed, the Outbreak Period is not counted. Therefore, Eliza’s last day to submit an appeal is 148 days (180 – 32 days following January 28 to March 1) after June 29, 2020, which is November 24, 2020.
Example F – Internal appeal, employee pension benefit plan
Frank received a notice of adverse benefit determination from Frank’s 401(k) plan on April 15, 2020. The notification advised Frank that there are 60 days within which to file an appeal. What is Frank’s appeal deadline?
Conclusion: When determining the 60-day period within which Frank’s appeal must be filed, the Outbreak Period is not counted. Therefore, Frank’s last day to submit an appeal is 60 days after June 29, 2020, which is August 28, 2020.