On February 26, 2021, the Department of Labor (DOL) released guidance on the duration of deadline extensions provided under a joint rule issued with the Internal Revenue Service (IRS) in April of 2020. The new guidance, Employee Benefit Security Administration (ESBA) Disaster Relief Notice 2021-01, comments on a 365-day maximum extension based on statutory limits and applies the limit on an individual basis, not to the joint rule as a whole.

On April 28, 2020, the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) issued a joint rule titled Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak. The rule is in response to President Trump’s Proclamation of National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, in which he declared a national emergency beginning March 1, 2020.

This rule paused a number of deadlines related to COBRA continuation coverage, health and disability claims submissions and appeal rights, and HIPAA special enrollment periods for group health plans. The rule applied retroactively, requiring plans to put deadlines on hold starting March 1, 2020 through the end of the outbreak period, defined as 60 days following the end of the national emergency, or any other date announced by the DOL and IRS in subsequent guidance. The maximum deadline extension for any individual occurrence is 365 days.

What does the new guidance include?

The new guidance provides information on how the ERISA 365-day extension maximum applies. The outbreak period reached 365 days on February 28, 2021. However, the 365-day maximum extension applies to individuals and their individual deadlines, not to the relief as a whole.

While the outbreak period overall has now reached 365 days, it will continue for certain COBRA, HIPAA, and claim  deadlines that have occurred and will continue to occur after March 1, 2020. Deadline extensions are available to individuals based upon their specific circumstances. The end of the individual extension is based on the earliest date of 365 days or the end of the outbreak period.

How do I calculate the extension?

The extension under this rule works by essentially pausing applicable deadlines until the earlier of 365 days or the end of the outbreak period (60 days after the end of the national emergency, or a date indicated in later guidance by the DOL and IRS).

For now, since we don’t know when the national emergency will end, deadlines can only be enforced upon reaching the maximum 365-day extension.

For purposes of the following examples, let’s assume, the national emergency is lifted on August 1, 2021. The outbreak period then ends on September 30, 2021.

Claim Submission Period for a Health Care FSA or HRA:

• Participants of a 2019 calendar year plan with a three-month runout period that would have ended on March 31, 2020, would be able to submit claims for reimbursement through March 31, 2021. While the outbreak period continues after this date, these participants would have reached the maximum 365-day extension from the original deadline.

• Participants of a 2020 calendar year plan with a three month runout period, that would have ended on March 31, 2021 would be able to submit claims through December 31, 2021. These participants would receive the full three months of runout beginning the day after the outbreak period ends on September 30, 2021. (End of national emergency, August 1, 2021, plus 60 days is the end of the outbreak period, September 30, 2021, plus the three month runout is the new deadline, December 31, 2021.)

60-day COBRA Election Period:

• Qualified beneficiaries whose election period was April 1, 2020 through May 30, 2020 would be able to elect COBRA coverage through May 30, 2021. While the outbreak period continues after this date, they would have reached the maximum 365-day extension.
• Qualified beneficiaries whose election period is April 1, 2021 through May 30, 2021 would be able to elect COBRA coverage through November 29, 2021. These participants would receive the full 60 days of their election period beginning the day after the outbreak period ends on September 30, 2021. (End of national emergency, August 1, 2021, plus 60 days is the end of the outbreak period, September 30, 2021, plus the 60-day election period is the new deadline, November 29, 2021.)

Which timeframes are affected?

The rule applies to all of the following timeframes.

COBRA Continuation Coverage

• 60-day election period
• 45-day initial premium payment deadline
• 30-day grace period for monthly COBRA premium payments
• 60-day period for individuals to provide notice of a qualifying event to the employer, or notice of a disability determination
• 14-day period for plans to provide election notices to qualified beneficiaries (44 days if the employer is the plan administrator)

Health and Disability Claims

• Claim filing deadlines (set by the plan)
• 180-day period for participants to appeal claim denials
• Deadlines for requesting external review and related timeframes

HIPAA Special Enrollment

• 60-day period allowing enrollment after loss of CHIP or Medicaid coverage
• 30-day period allowing enrollment due to loss of other coverage, or life events such as marriage, birth, adoption, or placement for adoption

This recent DOL guidance provides clarity and welcome assistance as we continue to manage the deadline extensions until we have reached the end of the national emergency.