The United States Department of Labor and IRS issued a joint rule (“Rule”) last week, providing relief from certain pre-established deadlines for both group health plans and their plan members. The Rule was issued in response to President Donald Trump declaring a national emergency with respect to the coronavirus (COVID-19) outbreak (“National Emergency”). The Rule defines the period starting March 1, 2020 and ending 60 days after the announced end of the National Emergency as the “Outbreak Period.” The Rule requires that all group health plans subject to ERISA or the Internal Revenue Code to disregard the Outbreak Period in determining various deadlines applicable to the benefit plan or plan members. The Rule applies to all group health plans covered by ERISA or the Internal Revenue Code, and the Department of Health and Human Services has announced that it will extend similar relief to non-federal governmental health plans.
Specifically, the Rule requires the Outbreak Period to be disregarded in determining the following deadlines:
HIPAA Special Enrollment. The 30 and 60 day HIPAA special enrollment periods are extended. Thirty-day special enrollment periods may be triggered when eligible employees or dependents lose eligibility for other health plan coverage in which they were previously enrolled, and when an eligible employee acquires a dependent through birth, marriage, adoption, or placement for adoption. Sixty-day special enrollment periods may be triggered by changes in eligibility for state premium assistance under the Children’s Health Insurance Program.
The Rule provides an example of an individual eligible for, but previously declining participation in, her employer-sponsored group health plan. (For purposes of the example, the Rule assumes that the National Emergency ends on April 30, 2020, which would mean the Outbreak Period ends on June 29, 2020 (the 60th day after the end of the National Emergency).) On March 31, 2020, the individual gave birth and would like to enroll herself and the child into her employer’s plan. The Outbreak Period is disregarded for purposes of determining the individual’s special enrollment period. The individual may exercise her special enrollment rights for herself and her child into her employer’s plan until 30 days after June 29, 2020, which is July 29, 2020, provided that she pays the premiums for any period of coverage.
COBRA. Multiple COBRA deadlines have been extended until the Outbreak Period ends, including (1) the deadline to notify the plan of a qualifying event; (2) the deadline for individuals to notify the plan of a determination of disability; (3) the 14 day deadline for plan administrators to furnish COBRA election notices; (4) the 60 day deadline for participants to elect COBRA; and (5) the 45 day deadline in which to make a first premium payment and 30 day deadline for subsequent premium payments.
The Rule provides examples of the COBRA deadline extensions by assuming that the National Emergency again ends on April 30, 2020, and thus the Outbreak Period ends on June 29, 2020. As such, the period from March 1, 2020, through June 29, 2020 would be disregarded with respect to computing these deadlines. For example, if a participant in a group health plan subject to COBRA experiences a COBRA-qualifying event and receives a COBRA election notice on April 1, 2020, then the participant would have until Aug. 28, 2020 (60 days after the end of the Outbreak Period under these assumptions) to make a timely COBRA election.
Similarly, since the Rule extends the deadline for an individual to pay a COBRA premium, a group health plan may not deny coverage for a failure to pay a COBRA premium due within the Outbreak Period, as long as the individual makes the appropriate payment within 30 days (or 45 days if it is for the initial COBRA premium payment) after the end of the Outbreak Period.
Please note that the Rule contemplates that group health plans will suspend coverage for COBRA enrollees until such enrollees have timely paid their COBRA premiums. Once such payments are received, the group health plans can reinstate coverage retroactively.
Two examples provided by the Rule with respect to payment of the COBRA premiums are as follows:
- Example: On March 1, 2020, Individual C was receiving COBRA continuation coverage under a group health plan. More than 45 days had passed since Individual C had elected COBRA. Monthly premium payments are due by the first of the month. The plan does not permit qualified beneficiaries longer than the statutory 30-day grace period for making premium payments. Individual C made a timely February payment, but did not make the March payment or any subsequent payments during the Outbreak Period. As of July 1, Individual C has made no premium payments for March, April, May, or June. Does Individual C lose COBRA coverage, and if so for which month(s)?
- Conclusion: In this example, the Outbreak Period is disregarded for purposes of determining whether monthly COBRA premium installment payments are timely. Premium payments made by 30 days after June 29, 2020, which is July 29, 2020, for March, April, May, and June 2020, are timely, and Individual C is entitled to COBRA continuation coverage for these months if she timely makes payment. Accordingly, premium payments for four months (i.e., March, April, May, and June) are all due by July 29, 2020. Individual C is eligible to receive coverage under the terms of the plan during this interim period even though some or all of Individual C’s premium payments may not be received until July 29, 2020. Individual C’s plan may not deny coverage, but may make retroactive payments for benefits and services received by the participant during this time.
- Example: Same facts as the example immediately above. By July 29, 2020, Individual C made a payment equal to two months’ premiums. For how long does Individual C have COBRA continuation coverage?
- Conclusion: Individual C is entitled to COBRA continuation coverage for March and April of 2020, the two months for which timely premium payments were made, but Individual C is not entitled to COBRA continuation coverage for any month after April 2020. Benefits and services provided by the group health plan (e.g., doctors’ visits or filled prescriptions) that occurred on or before April 30, 2020 would be covered under the terms of the plan. The plan would not be obligated to cover benefits or services that occurred after April 2020.
Claims Procedures. The deadlines are extended for plan members 1) to file claims for benefits, and 2) to appeal adverse benefit determinations. (Group health plans must normally allow at least 180 days in which to appeal.) Immediately below are two examples from the Rule (which again assume that the Outbreak period ends June 29, 2020):
- Example: Individual D is a participant in a group health plan. On March 1, 2020, Individual D received medical treatment for a condition covered under the plan, but a claim relating to the medical treatment was not submitted until April 1, 2021. Under the plan, claims must be submitted within 365 days of the participant’s receipt of the medical treatment. Was Individual D’s claim timely?
- Conclusion: Yes. For purposes of determining the 365-day period applicable to Individual D’s claim, the Outbreak Period is disregarded. Therefore, Individual D’s last day to submit a claim is 365 days after June 29, 2020, which is June 29, 2021, so Individual D’s claim was timely
- Example: Individual E received a notification of an adverse benefit determination from Individual E’s plan on January 28, 2020. The notification advised Individual E that there are 180 days within which to file an appeal. What is Individual E’s appeal deadline.
- Conclusion: When determining the 180-day period within which Individual E’s appeal must be filed, the Outbreak Period is disregarded. Therefore, Individual E’s last day to submit an appeal is 148 days (180 – 32 days following January 28 to March 1) after June 29, 2020, which is November 24, 2020.
External Review Process. Non-grandfathered group health plan deadlines have been extended until the Outbreak Period ends with respect to requests for external review. (Group health plans must allow four months after the receipt of a notice of a final adverse benefit determination in which to request an external review.) Other deadlines that apply for perfecting an incomplete request for review are also extended.
Furnishing Notices. Group health plans will not be treated as having violated ERISA if they act in good faith and furnish any notices, disclosures, or documents that would otherwise have to be furnished during the Outbreak Period “as soon as administratively practicable under the circumstances.”