DOL Issues Clarification for ERISA-Governed Group Health Plans

Overview


Two days before the one-year anniversary of the official start of the COVID-19 outbreak, the US Department of Labor (DOL) issued a last-minute notice clarifying its prior guidance that relaxed the deadlines for the Employee Retirement Income Security Act -governed group health and welfare plans (ERISA) related to the Consolidated Omnibus Budget Reconciliation Act (COBRA) and various special enrollment and claims procedures. Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2021-01 (Notice 2021-01) advises that for the deadlines subject to relief under the prior guidance, plans should continue to disregard the outbreak period in calculating timing requirements until the earlier of:

  • One year from the date an individual (emphasis added) was first eligible for relief (March 1, 2020, the first day of the outbreak period, being the first date an individual could be eligible), or
  • 60 days from the announced end of the outbreak period

And, under no circumstances will the disregarded period for any given individual exceed one year. The guidance effectively “tolls” the deadlines on an individualized basis. For example, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, that individual has either until the earlier of March 1, 2022, (one year from the date they were first eligible) or the end of the outbreak period—if that is announced before March 1, 2022.

Notice 2021-01 also suggests plan sponsors send communications to participants whose deadlines are quickly approaching. Plans might want to reissue any pre-pandemic communications sent out that do not accurately reflect the new deadlines to participants. This may help to mitigate the risk of suits by participants for incorrect deadlines.

In conclusion, though Notice 2021-01 provided a needed answer, it clarifies little by imposing unique, individual-specific deadlines. Organizations like the American Benefits Council had advocated setting a clear end to the outbreak period on February 28, 2021, but it became apparent in recent months as the pandemic persisted that it was uncertain how the DOL and US Department of the Treasury would handle setting the one-year limit. This decision, unfortunately, will no doubt lead to confusion among plan sponsors and service providers and increased administrative burdens. Plans should continue to watch for more guidance on this issue.