DOL Deadline Extensions for Sponsors of Plan Members
In accordance with emergency powers granted in the aftermath of the COVID-19 pandemic, the IRS and DOL have extended a number of benefit plan deadlines and provided further relief to plan members and sponsors. diet. The Jones Walker May 22, 2020, Customer alert on employee benefits provided a summary of the guidance.
On Friday February 26, 2021, the DOL issued advice according to certain deadlines related to employee benefit plans, just before the expiration of certain benefits the following Monday. Deadline extensions may continue after February 28, 2021, provided that the deadline in question has not already been extended by one year from that date, and extensions should be measured person by person.
DOL and IRS final rule
The final rule of May 4, 2020 generally suspended certain benefit plan deadlines for the duration of the “epidemic period”, which is an open period beginning on March 1, 2020 and ending 60 days after the end of the period. national COVID-19. emergency. However, the power granted to the DOL and IRS under Section 518 of ERISA and Section 7508A of the Tax Code only allows relief for a given circumstance to be extended for a period of one year. (the toll period).
Under the final rule, the epidemic period is not taken into account for the purposes of the following time limits:
The deadline for plan sponsors to issue COBRA qualifying event election notices (normally 44 days for employers who act as both plan sponsor and administrator), although employers must still issue opinions as soon as administratively possible
The deadline for participants to choose COBRA coverage (normally 60 days after the employer issues a COBRA Qualifying Event Notice)
The deadline for COBRA participants to pay COBRA premiums (normally within 45 days of first choosing COBRA coverage and within 30 days of each monthly due date thereafter)
The deadline for an employee to notify a plan of a COBRA eligible event, such as a divorce (normally 30 days)
The deadline to apply for a special enrollment under HIPAA portability rules, such as marriage or childbirth (normally 30 days, but 60 days in the event of loss of Medicaid or CHIP coverage)
The deadline for a participant to submit a claim for benefits or to appeal a denial of benefits by an ERISA plan
The deadline for requesting (and refining) the external review of a denied health plan appeal (normally within 120 days of notification of the appeal decision)
Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2020-01
EBSA Notice 2020-01 (EBSA Notice 2020) provided additional relief primarily for plans and plan sponsors. This includes:
Extension of time limits for providing any notices or disclosures (except those described in the final rule above) to plan members, beneficiaries and other persons under Title I of ERISA during the period epidemic, provided the employer acts in good faith and provides the notice or disclosure as soon as administratively possible. The EBSA Notice 2020 states that “good faith” includes providing notices electronically, which is expanded to include text messages and continuous access websites.
Extension of the deadline for submitting member contributions and loan repayments to pension plans, provided that the failure is solely attributable to the COVID-19 pandemic.
Failure to enforce breaches of loan and distribution verification procedures during the outbreak period (other than legal requirements under IRS jurisdiction, such as obtaining spousal consent), provided that :
The failure was due to the COVID-19 pandemic.
Diligent good faith efforts are made to comply with the requirements.
Procedural deficiencies are corrected as soon as administratively possible.
EBSA Disaster Relief Notice 2021-01
The ZIEB 2021-01 Disaster Relief Notice (the 2021 ZIEB Notice) provides that the toll period ends the earlier of (1) one year from the date on which the deadline would have started to run for the individual in question, or (2) the end of the epidemic period. Plan administrators must measure toll periods person by person.
For example, if an employee had a COBRA qualifying event on February 15, 2020, that employee’s time to choose COBRA coverage was suspended at the start of the outbreak period on March 1, 2020, when 15 days had passed. had elapsed. On February 28, 2021, this employee’s one-year toll period ended. The employee has 45 remaining days (i.e. until April 14, 2021) to choose COBRA coverage.
Alternatively, if an employee had a COBRA qualifying event on June 15, 2020, that employee’s election deadline was already counted on that date. This employee’s toll period would end one year later, on June 14, 2021 (assuming the outbreak period does not end before that date). Since no part of the election period has elapsed before March 1, 2020, that employee’s 60-day election period begins on June 15, 2021 and the employee will have until August 14, 2021 to elect COBRA.
The 2021 EBSA advisory reminds employers to act reasonably, prudently and in the best interests of employees and their families. Plan trustees should take reasonable accommodations to avoid loss or undue delay in payment of benefits and take steps to help prevent loss of benefits due to missed deadlines.
The 2021 EBSA Notice states that plan trustees should consider advising employees of the end of the adjustment period. Plan trustees should ideally tailor these notices to each person’s toll period, some of which ended shortly after the EBSA issued its last guidance, and may need to reissue or modify prior disclosures. Finally, plan trustees should consider communicating other coverage options to employees, such as coverage options through healthcare.gov.
Where the plan trustees have acted in good faith and with due diligence in the circumstances, the approach to applying the DOL “will be marked by an emphasis on compliance assistance” and “grace periods and other measures. recovery ”. Thus, any employer who could not comply with an action, notice or disclosure required due to the pandemic should comply as soon as possible and document their good faith efforts to comply.
Employers should coordinate with their insurers, reinsurance providers, third party administrators, health FSA administrators, COBRA administrators, pension plan registrars and other service providers to determine how they will administer rollover time extensions on an individual basis. Employers should make every effort in accordance with the above guidelines to inform members and beneficiaries of any material changes in plan benefits or procedures, perhaps with the assistance of service providers where possible.
Remember that legal principles can change and vary widely in their application to specific factual circumstances. You should consult a lawyer about your individual plan. The same notice may vary depending on the terms of your plan and specific factual circumstances.