Guidance on Continuation of Employee Benefit Plan COVID-19 Relief

On February 26, 2021, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued Disaster Relief Notice 2021-01, which provides continuing relief for certain employee benefit plan deadlines and disregards the COVID-19 Outbreak Period. The relief will primarily be of benefit to employee benefit plans, plan participants and beneficiaries, employers and other plan sponsors, plan fiduciaries, and other service providers impacted by the COVID-19 outbreak. 

The guidance requires employers to disregard the Outbreak Period — which began on March 1, 2020 and was set to expire on February 28, 2021 — when enforcing employee benefit plan deadlines, giving plan sponsors additional time to distribute plan notices and disclosures. With that said, individuals and plans will have the applicable periods disregarded until the earlier of:

  • One year from the date they were first eligible for relief; or
  • 60 days after the announced end of the National Emergency (the end of the Outbreak Period).

On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notice will resume. In no case will a disregarded period exceed one year.

For example, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, that requirement is delayed until February 28, 2021. This date is the earlier of one year from March 1, 2020, or the end of the Outbreak Period (which remains ongoing).

The DOL recognizes that plan participants and beneficiaries may continue to encounter complications due to the relief’s one-year limit. In response, plan fiduciaries are encouraged to make reasonable accommodations to prevent the loss of or undue delay in payment of benefits in these cases and should take steps to minimize the possibility of individuals losing benefits due to a failure to comply with pre-established timeframes.

The Creative Benefits, Inc. Team will continue to monitor developments and provide updates regarding how the DOL’s guidance will impact the healthcare industry and employee benefits market.

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