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COVID-19 Relief Extends COBRA, HIPAA & Other Plan Deadlines

On April 28, 2020, the Departments of Labor (DOL) and the Treasury issued deadline relief to help employee benefit plans, plan participants and plan service providers impacted by the COVID-19 outbreak. Thereafter, on February 26, 2021, DOL Disaster Relief Notice 2021-01 clarified the duration of this relief.

The deadlines were initially extended by disregarding an Outbreak Period from March 1, 2020, until 60 days after the announced end of the National Emergency (or such other date announced by the Departments). Under federal law, this period could not exceed one year, meaning that the relief was expected to expire on February 28, 2021. However, the Notice allows the relief to extend beyond this date in some situations, while emphasizing that plan administrators should continue to make reasonable accommodations to prevent the loss of or delay in payment of benefits.

Certain timeframes are extended for health plan participants to:

  • Request special enrollment under HIPAA;
  • Elect COBRA continuation coverage, pay COBRA premiums and notify the plan of a COBRA qualifying event; and
  • File benefit claims and appeals and request external review of denied claims.

HIPAA Special Enrollment Rights

Group health plans are required to provide special enrollment opportunities to certain employees, dependents and COBRA qualified beneficiaries following a qualifying event such as birth, adoption, marriage or loss of other coverage. Normally, an employee has 30- or 60-days from the date of the event to notify Human Resources to make a change to their existing benefits. However, the Notice’s new rules state that the 30- or 60-day timeframe does not start until the earlier of either:

  • One year from the date of the qualifying event; or
  • The end of the Outbreak Period (60 days after the end of declared National Emergency).

In the case of birth, adoption or placement for adoption, coverage must be effective retroactively to the date of birth, adoption or placement. In cases of marriage or loss of other coverage, coverage must be effective no later than the first day of the first month following the date the plan receives the request for enrollment.

Marketplace Open Enrollment

In the case of ERISA group health plans, plans should consider ways to ensure that participants and beneficiaries who are losing coverage under their group health plans are made aware of other coverage options that may be available to them — such as the opportunity to obtain coverage through the Health Insurance Marketplace in their state.

Federal COBRA Administration Changes

The legislative updates released on February 26, 2021 also included a temporary extension of COBRA deadlines in accordance with the Outbreak Period’s new one-year rules. The purpose of this is to give terminated workers more time to elect COBRA coverage and pay premiums.

Under COBRA, employees and dependents who lose active coverage as a result of a qualifying event, such as termination of employment or reduction of hours, have 60 days to elect continuation of coverage after receiving a COBRA election notice. However, these recently released new rules state that the 60-day timeframe does not start until the earlier of either:

  • One year from the date of the qualifying event; or
  • The end of the Outbreak Period (60 days after the end of declared National Emergency).

With that said, coverage cannot be terminated for nonpayment until after the Outbreak Period or their one-year event date, whichever comes first. If unpaid as of this new deadline, COBRA beneficiaries will owe payment of all outstanding premiums or the participant can be terminated retroactively. Please note at this time, changes do not apply to state COBRA.

For additional information, please click here. It is important to note that employers are required to notify their employees of these changes in the medium most accessible to their employee population.  

It is our goal to guide you through ongoing change. Questions? Contact the team at Creative Benefits, Inc. at 866-306-0200 or solutions@creativebenefitsinc.com.