Update on 4/18/2023: The Department of Labor (DOL) has informally commented that the Outbreak Period will continue to run through July 10, 2023, despite the National Emergency ending earlier than anticipated per H.J. Res. 7. Formal departmental guidance confirming that July 10, 2023, is in fact the end of the Outbreak Period is anticipated in the coming weeks. See our blog, COVID-19 Emergency Declarations Anticipated to Expire: Impact to Group Health Plans, for the most recent guidance.See our blog, COVID-19 Emergency Declarations Anticipated to Expire: Impact to Group Health Plans, for most recent guidance.

Recently, President Biden further extended the COVID-19 National Emergency, which was set to expire on March 1, 2022. The extension of the National Emergency further “tolls,” or pauses, certain health and welfare benefit deadlines, which are paused up to 1 year or until 60 days after the end of the National Emergency, whichever occurs earlier.

This means that employers should continue to provide additional time for employees to exercise their HIPAA special enrollment rights, elect and pay for COBRA continuation coverage, and file and appeal benefit determinations.

Background

In April 2020, the Departments of Labor and Treasury (Departments) issued deadline relief that “tolled” certain health and welfare benefit deadlines that fell within the “Outbreak Period,” which began on March 1, 2020, and ends 60 days after the end of the COVID-19 National Emergency. In March 2021, the Departments released further guidance, which clarified that these deadlines could be extended up to 1 year from the original deadline or until the end of the Outbreak Period, whichever occurs earlier.

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 the 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 initially discussed these deadline extensions in our prior blog “COVID-19 Deadline Relief for Employer, Participants, and Beneficiaries.”

End of the Outbreak Period

The Outbreak Period ends 60 days after the end of the COVID-19 National Emergency, or an earlier date announced by the Departments. Thus far, the Departments have not announced an end to the Outbreak Period, meaning the effective dates of the deadline extensions have been based on the end date of the COVID-19 National Emergency.

The COVID-19 National Emergency, initially set to expire on March 1, 2021, has been extended by President Biden twice. Generally, declarations of national emergencies are effective up to 1 year or until the end to the emergency is declared. This means the COVID-19 National Emergency will be extended to March 1, 2023, unless the President announces an earlier end date. As such, the Outbreak Period and the deadline extensions are set to end April 30, 2023, unless an end to the COVID-19 National Emergency is declared before March 1, 2023.

Impact on Employers

The extension of the Outbreak Period means that employers will continue to have additional time to furnish plan documents and must continue to provide employees with additional time to exercise their HIPAA special enrollment rights, elect and pay for COBRA continuation coverage, and file and appeal benefit determinations.

Below, we outline employer considerations and best practices.

  • Furnish required ERISA notices and disclosures as soon as administratively practicable.
    • Though employers have additional time to furnish ERISA notices and disclosures during the Outbreak Period, the deadline relief is only available if employers act in good faith to furnish notices and disclosures “as soon as administratively practicable” under the circumstances. As such, it is recommended that employers make efforts to distribute the required notices according to the “normal” distribution deadlines.
    • During the Outbreak Period, 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.
  • Ensure COBRA initial and election notices incorporate the deadline extensions.
    • Employers should work with their COBRA vendor to ensure any notices related to COBRA (e.g., initial notice, election notice) continue to incorporate the deadline extension to elect and pay for COBRA coverage.
  • Exercise caution around HIPAA special enrollment right (SER) 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 the extension period.
    • Retroactive Coverage: If an employee wants to take advantage of the HIPAA SER deadline extension, enrollment may be retroactive to the date of the HIPAA special enrollment event, though only in certain circumstances. If the SER is birth or adoption, then the election should be retroactive to the date of birth or adoption. For all other HIPAA SERs, HIPAA only requires plans to make the enrollment no later than the first of the month following notification by an employee. Some plans may be drafted to provide enrollment as of the date of the event (i.e., retroactive enrollment). If a plan has such a design, employees may be able to take advantage of retroactive enrollment when there is a HIPAA SER deadline extension. If retroactive enrollment is requested by an employee, employers should review their plan documents to determine if retroactive enrollment is permitted and should determine whether their carrier (if fully insured) or stop-loss provider (if self-insured) would permit the retroactive enrollment.
  • Notify employees of their deadline to file claims and request appeals and amend plan documents, as necessary.
    • Employers with Healthcare Flexible Spending Account (FSA) Run Out Provisions: Employers who offer a 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) that falls within the Outbreak Period should ensure their FSA vendor extends the run-out period and notifies plan participants accordingly. Employers should also be aware of how their FSA plan design might affect an employee’s ability to utilize pre-tax Health Savings Account (HSA) contributions.

Additional Resources

Sequoia Forewords

Department Guidance

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. © 2023 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Emerald Law — Emerald is a Senior 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.