DOL Proffers New Tolling Procedure for COBRA, Special Enrollment, and Claims Deadlines

On February 26, 2021, the DOL issued Disaster Relief Notice 2021-01 to provide guidance on the duration of COVID-19 relief for certain actions related to employee benefit plans. 

This guidance revises the DOL’s Disaster Relief Notice 2020-01 and its Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak, which paused the deadlines for COBRA elections, ERISA notice and disclosure requirements, claims procedures, and special enrollment elections until 60 days after the announced end of the COVID-19 National Emergency (the “Outbreak Period”). 

Due to the one-year tolling limit in ERISA and the Internal Revenue Code, the relief provided by the 2020 Notices was set to expire on February 28, 2021. However, the DOL’s new guidance extends the relief beyond this date in certain situations.

Since the COVID-19 National Emergency is ongoing, the Notice provides that plans and participants subject to prior relief in the 2020 Notices 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 Outbreak Period.

In other words, the deadline suspensions are to be calculated on an individual basis and will apply for up to one year. The Notice provides the following examples:

  • If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the deadline is delayed until February 28, 2021.
  • If a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the deadline is delayed until the earlier of one year from that date (March 1, 2022) or the end of the Outbreak Period.
  • If a plan was required to provide a notice or disclosure by March 1, 2020, the extension for the notice or disclosure would expire on February 28, 2021.

Plan sponsors will need to determine when the 12-month period expires for any disclosure or election delayed under the 2020 Notices. In addition, the Notice urges plan administrators to provide notices to employees as follows:

  • When the end of a relief period could put individuals at risk of losing coverage.
  • When prior plan disclosures need to be amended or reissued to reflect the time in which participants were required to take certain actions (e.g., COBRA election notices and claims deadlines).
  • When participants are losing coverage under their group health plans, to make them aware of other coverage options, including state exchanges.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment legal compliance needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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