New Outbreak Period Guidance Requires Plan Action 

EBSA Disaster Relief Notice 2021-01 clarifies the extent of the outbreak period relief defined in last year’s Joint Notice and Notice 2020-01. The outbreak period relief requires group health plans to disregard the period starting on March 1, 2020, and ending 60 days after the end of the COVID-19 National Emergency (the “outbreak period”), subject to a one year limitation contained in both ERISA and the Internal Revenue Code (IRC), for certain timeframes and deadlines. The National Emergency declaration was due to terminate on its anniversary date – March 1, 2021 – but was continued last week by President Biden for another year (unless terminated earlier by congressional or presidential action). 

In light of the ongoing National Emergency and the limitations of ERISA and the IRC, Notice 2021-01 clarifies that the timeframes subject to the outbreak period relief will have their applicable periods disregarded until the earlier of:

1. One year from the date the relief was first available
2. 60 days after the announced end of the COVID-19 National Emergency

In no case will a disregarded period exceed one year. This means that until the COVID-19 National Emergency is over, each timeframe/deadline that is subject to the outbreak period relief must be suspended for up to one year.

Here are some examples:

• If under normal circumstances a group health plan participant would have been required to notify the plan of the birth of a child by March 1, 2020, the deadline to enroll the child is now February 28, 2021, because this is the earlier of one year from March 1, 2020, or the end of the outbreak period.
• If a COBRA qualified beneficiary would have been required to make a COBRA election by May 1, 2021, this COBRA election deadline is delayed until the earlier of April 30, 2022, or the end of the outbreak period.

As a reminder, the outbreak period relief applies to the following: 

• The 30-day (or 60-day, as applicable) period for individuals to make HIPAA special enrollment right requests
• The various timeframes for participants and qualified beneficiaries to notify the plan of specific COBRA qualifying events like divorce, death or disability, to elect COBRA coverage, and to pay COBRA premiums
• The timeframes for participants to file or perfect benefit claims or appeals of denied claims, including for health flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs)
• The various timeframes in which plans must provide ERISA-required notices and disclosures (including SPDs, SMMs, COBRA notices, etc.)

While the outbreak period relief is required of plans subject to ERISA, previous guidance clarified that non-federal governmental plans are not required to provide the same relief to plan participants and other individuals, but are encouraged to do so.

New Communications and Additional Flexibility May Be Required

Notice 2021-01 provides that plan fiduciaries should act reasonably, prudently, and in the interest of employees and their families. This includes:

• Reissuing or amending plan disclosures if they failed to provide accurate information regarding the time in which the participants and beneficiaries were required to take action (e.g., COBRA election notices and claims procedure notices)
• Taking steps to minimize the loss of benefits for failure to meet deadlines, including making “reasonable accommodations” (not defined)
• Considering proactively notifying plan participants and COBRA qualified beneficiaries of an approaching deadline that can cause the individual to lose protections, benefits or rights under the group health plan
• Considering ways to ensure that participants and beneficiaries who are losing coverage under their group health plans are made aware of other coverage options that may be available to them, including the opportunity to obtain coverage through the Health Insurance Marketplace in their state.

Plan Notices and Disclosures

The outbreak period relief gives plans acting in good faith extra time to provide specific notices and disclosures (including SPDs, SMMs, COBRA notices, etc.) required under ERISA and allows plans to use electronic methods (e.g., email, text messaging, continuous access websites) as long as it’s reasonable to believe recipients can access the electronic communication. The outbreak period relief applies to these ERISA plan notice and disclosures in the same way as it applies to the individual timeframes noted above. For example, if a plan was required to provide a certain disclosure by April 1, 2020, the relief would end on March 31, 2021, and the plan would be required to furnish the notice by April 1, 2021.

Plan sponsors and administrators can continue to use electronic means even if the current rules for group health plans and other benefits don’t allow it. However, it should be noted that Notice 2021-01 suggests notices and disclosures provided electronically in reliance on this relief may need to be refurnished if the plan cannot demonstrate actual receipt by the participant. 

Employer Action Items

In light of this recent guidance, employers should:

• Check with group health plan administrators – including TPAs, claims administrators, COBRA administrators, carriers, FSA vendors, and stop-loss vendors – to determine how this recent guidance will affect plan administration
• Evaluate if any previous communications about deadlines need to be corrected in light of the new guidance and plan accordingly
• Evaluate if, when, and how to provide notices to plan participants, COBRA qualified beneficiaries, and other individuals identifying deadlines related to the end of each individual’s relief period
• Confirm communications regarding employer coverage termination contain information related to other coverage options, including the Health Insurance Marketplace special enrollment period open through May 15, 2021, on healthcare.gov and most state-based Health Insurance Marketplace platforms
• Confirm that any electronic notices already furnished with reliance on the outbreak period relief were actually received
• Confirm future notices and communications are timely provided

Watch for updates to our prior GRIST on this topic.

More Mercer posts