DOL Gives Extra Time to Plan Participants and Beneficiaries: Benefits Guidance in the Time of COVID-19

Plan participants and their beneficiaries may now have extra time to exercise some of their rights under the employee benefit plans in which they participate.  On April 28, 2020, the Department of Labor, the Internal Revenue Service, and the Department of the Treasury issued a joint notice extending certain timeframes applicable to employee benefit plans. The joint notice was published as a final rule in the Federal Register on May 4, 2020 (“Final Rule”), issued pursuant to Section 518 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), as recently amended by the CARES Act.  (For more information on the CARES Act, please refer to the article posted here.) The Final Rule applies to all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Internal Revenue Code of 1986, as amended.

Length of Extension

The Final Rule extends certain deadlines until the end of the “Outbreak Period.”  The Outbreak Period begins March 1, 2020 and expires 60 days after the end of the declared COVID-19 national emergency, or another date if provided by future guidance.  (If different Outbreak Period end dates occur for different parts of the country, DOL will issue additional guidance regarding the application of the relief it has provided.)  For example, if the emergency declarations end on June 29, 2020, the Outbreak Period will expire on August 28, 2020.  However, pursuant to Section 518 of ERISA, the extension may not exceed one year.

Deadlines Affected

Plans must disregard the Outbreak Period when calculating deadlines related to the following elections:

• the 30-day or 60-day period (as applicable) for an individual to request a HIPAA special enrollment;
• the date for claimants to file benefit claims and appeals under the plan’s claims and appeal procedures;
• the date for claimants to file a request for external review after receipt of an adverse benefit determination;
• the date within which a claimant may file information to perfect a request for external review;
• the 60-day COBRA election period;
• the 45-day deadline for initial COBRA premium payments and the 30-day deadline for other COBRA premium payments; and
• the date for individuals to notify the plan of a qualifying event or determination of disability under COBRA.

The Final Rule also extends a deadline applicable to employers for providing COBRA election notices.  (For more information on extended COBRA deadlines, please refer to our recent post here.)

Next Steps for Plan Sponsors

Due to the importance of the elections covered by the Final Rule, plan sponsors should communicate them to employees as quickly as possible. Additionally, plan sponsors will need to work with their third-party administrators to ensure that they are ready to implement the extensions granted by the Final Rule.