Recently, the Department of Labor (DOL), Department of Treasury, and Internal Revenue Service (IRS) (collectively, “the Agencies”) released Disaster Relief Notice 2021-01, which clarifies the end date for COVID-19 deadline relief that was issued in April 2020. As a reminder, the relief suspends certain deadlines (outlined below) that fall within the “Outbreak Period,” which began on March 1, 2020 and ends 60 days after the announced end of the COVID-19 National Emergency.

Notice 2021-01 has two major implications:

  1. Individuals and plans can continue to take advantage of the deadline relief beyond February 28, 2021 if their deadline falls within the Outbreak Period (which is currently ongoing); and
  2. Individuals and plans are granted deadline extensions based on their own specific timeframes, but in no case can an extension exceed one year after their original deadline.

Below we review the new guidance, its impact on employers, and provide recommended employer action items and best practices.


What are the COVID deadline extensions?

In April 2020, the Agencies paused certain employer and employee deadlines in light of the COVID-19 National Emergency declaration. The following deadlines that fall within the “Outbreak Period” are subject to the extension:

  • Employer deadlines to:
    • Furnish required notices, disclosures, or other documents to participants and beneficiaries pursuant to their obligations under Employee Retirement Income Security Act or “ERISA” (e.g., summary plan descriptions (SPD), summary annual reports (SAR), COBRA notices, notice of HIPAA special enrollment rights, etc.)
  • Plan Participant and beneficiary deadlines to:
    • Request enrollment under their HIPAA special enrollment rights (which allow employees and/or dependents to enroll in group health plan coverage mid-year if a HIPAA special enrollment event occurs). As a reminder, HIPAA special enrollment events consist of the following:
      • Loss of eligibility for coverage under other group health plan coverage, Medicaid, or Children’s Health Insurance Program (CHIP);
      • Acquisition of a new spouse or dependent by marriage, adoption, placement for adoption, or birth; or
      • Gaining eligibility for state premium assistance under a state’s Medicaid plan or CHIP.
    • Elect COBRA continuation coverage and make COBRA premium payments; and
    • File benefit claims, appeal adverse benefit determinations, request an external review, and perfect an external review request.

We previously reviewed the above deadline extensions in our May 1, 2020 blog post.

When do the deadline extensions end?

ERISA permits the Agencies to suspend certain deadlines up to one year where an employee benefit plan, sponsor, administrator, participant, or beneficiary is affected by a declared disaster. Upon the declaration of the COVID-19 National Emergency, the Agencies exercised their power and extended the above deadlines beginning March 1, 2020 (i.e., the beginning of the “Outbreak Period”).

Though many believed the one-year limit meant that the deadline extensions would end February 28, 2021 (one year from March 1, 2020), the recent Agency guidance states that this limitation applies on a “per individual” and “per plan” basis. Accordingly, individuals and plans can continue to take advantage of deadline relief past February 28, 2021. Applicable deadlines will be suspended until the earlier of:

  • 1 year from the date individuals were first eligible for relief; or
  • 60 days after the announced end of the National Emergency (which is still ongoing and will mark the end of the Outbreak Period).

The date individuals/plans are first eligible for relief is the date when a deadline is first triggered. For example, individuals usually have 30 days after the date of marriage to request a HIPAA special enrollment. If an individual gets married within the Outbreak Period, the date the individual is first eligible for relief will be the date of marriage (e.g. the date the deadline is first triggered). The individual’s deadline will be suspended until the earlier of (a) 1 year after the date of marriage, or (b) until the end of the Outbreak Period. In other words, the individual’s new deadline will be the earlier of (a) 1 year after their original deadline to request enrollment, or (b) 30 days after the end of the Outbreak Period (the 30 days the individual had won’t begin “running” until after the end of the Outbreak Period). This means the individual cannot extend their deadline longer than 1 year from their original deadline date.

Notice 2021-01 provides examples 1-3 to demonstrate how the one-year limit applies:  

  • Example 1: A qualified beneficiary’s deadline to elect COBRA continuation coverage would have been March 1, 2020. The Joint Notice delays the deadline until February 28, 2021, which is the earlier of 1 year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing). The qualified beneficiary must elect coverage by March 1, 2021.
  • Example 2: A qualified beneficiary’s deadline to elect COBRA continuation coverage would have been March 1, 2021. The Joint Notice delays the deadline until the earlier of 1 year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.
  • Example 3: An employer was required to furnish a notice by March 1, 2020. Under the Joint Notice, the employer would need to furnish the notice on or before March 1, 2021 (one year from the date).
  • Example 4: An individual gets married on July 15, 2020. They must request a HIPAA special enrollment for their spouse within 30 days of the marriage under the terms of the plan (i.e., August 15, 2020). Since the marriage occurred during the Outbreak Period, the individual’s new deadline to request enrollment will be the earlier of 1 year from their original deadline to elect (August 15, 2021) or 30 days after the end of the Outbreak Period.
    • Scenario 1 (Outbreak Period ends before the 1-year period): Assuming the National Emergency ends on April 30, 2021, the Outbreak Period would end on June 30, 2021. The individual would still have 30 days after the end of the Outbreak Period to request enrollment because the 30 days the individual had to enroll will not start running until after the end of the Outbreak Period (so the 30 days begins running July 1, 2021).
    • Scenario 2 (1-year period occurs before the end of the Outbreak Period): Assume there has been no announced end of the National Emergency by August 15, 2021. The “deadline suspension” would end after 1 year after the date of marriage (i.e. July 15, 2020), and the individual would still have until August 15, 2021 to enroll their spouse. It is important to highlight that the August 15, 2021 deadline is one year from the original deadline to enroll (August 15, 2020). Looking at the original deadline will usually be a simpler method of determining when deadline extensions end in cases where one year has passed since the original deadline (and the National Emergency/Outbreak Period is ongoing).

Please note that Example 4 above was not provided in Notice 2020-01.

What do the Agencies recommend regarding deadline extension notices?

The Agencies encourage employers to make reasonable accommodations to prevent a loss or delay in benefits and minimize the possibility of individuals losing benefits due to a failure to comply with deadlines. Toward that end, the Agencies suggest the following:

  • Employers should consider sending a notice regarding the end of the relief period where an employer knows, or should reasonably know, that the deadline may cause plan participants and beneficiaries to lose protections, benefits, or rights under the plan;
  • Employers may need to reissue or amend previous plan disclosures that failed to provide accurate information on the end of the relief period (e.g., COBRA general notices, the COBRA election notice, deadline extension notices, or summary plan descriptions);
  • Employers should notify participants and beneficiaries losing coverage of other coverage options that may be available, including the opportunity to offer coverage through the Health Insurance Marketplace.

Employer Considerations

Employers should notify employees and COBRA beneficiaries when deadline extensions will end and must take the extensions into consideration when administering their plans (including working with relevant vendors to notify affected individuals and to implement the extension periods).

Below, we outline employer considerations and best practices.

  • Furnish required ERISA notices and disclosures before any deadline relief expires (if employer has not already done so).
    • It is important to note that deadline relief is only available if employers act in good faith to furnish notices and disclosures “as soon as administratively practicable” under the circumstances. During the deadline extension, employers can furnish documents electronically (e.g., email, text, continuous access sites) as long as employers reasonably believe individuals have effective access to the electronic medium used.
    • Where full and diligent compliance may not be possible (such as when a pandemic or natural disaster disrupts an employer’s place of business), the DOL may provide grace periods or other relief if an employer acted in good faith and with reasonable diligence under the circumstances.
  • Issue/Reissue COBRA initial and election notices with accurate deadlines.
    • Employers should ensure any notices related to COBRA (e.g., initial notice, election notice) previously provided to employees and COBRA beneficiaries are reissued or amended if the notices failed to provide accurate deadlines based on the new guidance.
    • Employers should ensure COBRA notices are accurate going forward and may need to work with their COBRA vendor to notify COBRA qualified beneficiaries of the extended deadlines to enroll and submit premium payments.
  • Exercise caution around HIPAA special enrollment right requests.
    • Employers should exercise caution when denying HIPAA special enrollment requests. If employers are considering denying a request, they should determine the employees’ original deadline to ensure the request does not fall within an extension.
  • Issue/Reissue notices on deadlines to elect COBRA continuation coverage and make premium payments.
    • Employers should reach out to their COBRA vendors to understand how they are implementing the extended deadlines and to ensure their vendor is accurately communicating the deadlines to COBRA qualified beneficiaries going forward.
    • For COBRA qualified beneficiaries who have not yet elected COBRA coverage (but still have the opportunity to do so under the deadline extension), employers may want to issue new notices with updated coverage/rate information and accurate election and payment deadlines. Employers may want to remind these individuals of their option to obtain coverage through the Marketplace Exchange, which may be less expensive than electing COBRA coverage and would not require individuals to retroactively enroll back to when coverage was first lost.
    • Employers may want to notify COBRA participants who are deferring premium payments of their deadline to make payments and provide an accounting of any missed payments. Employers may want to provide these individuals with a grace period before COBRA coverage is ultimately terminated.
  • Notify employees of their deadline to file claims and request appeals and amend plan documents, as necessary.
    • Employers may need to amend their summary plan description (SPD) to incorporate any deadline extensions to file benefit claims, appeal adverse benefit determinations, request an external review, and perfect an external review request. Please note that employers would also want to cover the extension of HIPAA special enrollment rights in any plan amendments. If amendments are made, employers should redistribute the SPD to plan participants, so they are notified of these changes (if they were not previously notified).
    • Employers with Healthcare FSA Run Out Provisions: Employers with a flexible spending account (FSA) with a run-out provision (i.e., a period after the plan year that permits participants to file claims incurred during the plan year) should reach out to their FSA vendor to determine how they are implementing the extended deadlines for the run-out period.
      • Employers with FSA run-out periods should notify employees of their extended deadline. In addition, employers may want to notify plan participants again before the run-out period deadline extension ends, which will be one year after the end of the run-out period (if this falls within the Outbreak Period) or the end of the Outbreak Period, whichever occurs earlier. Employers may want to work with their FSA vendors to create proper plan participant notices, depending on their plan specifics.

Additional Resources

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.