Compliance Corner: Extended Time Frames for Benefit Plans and Participants
The Department of Labor (DOL) and the Department of Treasury (IRS) jointly issued a Final Rule and FAQ for Participants and Beneficiaries on April 28, extending certain time frames for employee benefit plans as well as for plan participants and qualified beneficiaries. These extensions to the established time frames are provided through the duration of the National State of Emergency, plus a 60-day “Outbreak Period.” The information has been met with many questions from plan sponsors and third party administrators as they work to understand how to implement the extended time frames.
Impact on COBRA Provisions
Based on the final rule, COBRA qualified beneficiaries will have additional time to elect COBRA and to make payment of COBRA premiums. Typically, a qualified beneficiary has at least 60 days to elect COBRA continuation from the date of the election notice. An individual who elects COBRA has an additional 45 days after the election to make the initial payment. Under the rule, an individual experiencing a COBRA qualifying event on or after March 1, 2020 will have until 60 days after the Outbreak Period ends to elect COBRA and 45 days from the date of the election to make payment.
COBRA premium payment timelines are also extended. Payment of premium, starting with premium due March 1, would not be deemed delinquent until 30 days after the end of the Outbreak Period. So long as a COBRA participant makes payment within 30 days after the Outbreak Period ends, COBRA coverage must be made available for all months in which the premium is paid.
In a separate release, the DOL revised the model COBRA Notices for group health plans to use. The revised notices were updated to include information about the interaction between COBRA and Medicare. The notices, along with an FAQ document, can be found on the DOL’s Web site under COBRA Continuation Coverage.
Impact on HIPAA Special Enrollment Rights
Plan participants generally have 30 days from the date of the event to request a mid-year change to their enrollment under HIPAA Special Enrollment Rights provisions. For gain or loss of Medicaid/CHIP coverage, participants have 60 days to request the change. The final rule extends notice timelines until 30 days after the Outbreak Period (60 days for Medicaid/CHIP coverage changes).
Impact on Claims Procedures & External Review Processes
The final rule extends deadlines for filing benefit claims as well as appealing adverse benefit determinations and requesting external reviews. Group health plans and disability plans must typically provide claimants 180 days following receipt of an adverse benefit determination to appeal (60 days in the case of pension plans and other welfare benefit plans). Claims and appeals received within the required time frames following the end of the Outbreak Period would be considered timely and must be processed.
Impact on Notice Requirements
Plan sponsors have additional time to provide certain disclosures required under ERISA, such as summary plan descriptions, SBCs, summary annual reports, initial COBRA notices and WHCRA notices. Plans should act in good faith and the notices should be provided to participants “as soon as administratively practicable under the circumstances”. Additionally, plans are permitted to use electronic delivery methods as long as the plan reasonably believes participants have access to the method of delivery.
The duration of the National State of Emergency is not clear at this time. As a result, the end date of the Outbreak Period cannot be determined. However, the EBSA Disaster Relief Notice indicates that the extended time frames may not exceed one year as specified in ERISA Section 518, and as amended by section 3607 of the Coronavirus Aid, Relief and Economic Security Act (CARES Act).
Cobbs Allen benefits consulting teams are working with COBRA administrators, insurers and TPAs to ensure they’re prepared to appropriately administer the extended time frames for COBRA, special enrollments as well as claims & appeals processes. Reach out to your benefits consultant with any questions related to the expanded time frames and the final rule.
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