COVID-19 Benefit Deadline Extensions Update

We recently provided an update on the looming end date for COVID-19 related benefit deadline extensions, including COBRA and special enrollment periods, and the uncertainty due to lack of guidance from the DOL and IRS.

The agencies have now provided clarity on how the one-year limit to the “Outbreak Period” extension applies – holding that impacted benefit plan deadline extensions won't expire on Feb. 28, 2021. Instead, under EBSA Disaster Relief Notice 2021-01, the one-year limit runs from the date an action would otherwise have been required in a given situation.

Under the new guidance, deadlines will be determined on an individual basis, with applicable participant and plan timeframes disregarded until the earlier of: a) one year from the date they were first eligible for relief; or b) 60 days after the announced end of the National Emergency (the end of the Outbreak Period).

In other words, each participant or beneficiary has their own personal rolling deadline from the date of their own event. Employers also have the same rolling 1-year maximum period to issue any required notifications.

The Notice provides a helpful example: If a qualified beneficiary would have originally been required to make a COBRA election by March 1, 2020, that requirement would be delayed 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). Likewise, if an individual was to have made a COBRA election by June 1, 2020, that requirement would be delayed until May 31, 2021 (provided the Outbreak Period has not ended).

Because participants and beneficiaries may encounter ongoing problems due to the COVID-19 pandemic, plan administrators should continue to make reasonable accommodations to prevent the loss of or undue delay in payment of benefits. For fiduciaries that act in good faith with respect to ERISA’s disclosure and claims processing requirements, the DOL’s approach to enforcement will be marked by an emphasis on compliance assistance, and includes grace periods and other relief.