Agencies give hurricane relief to health plans and participants 

November 21, 2024

 

The Departments of Labor (DOL) and Treasury recently issued a joint notice providing extensions for a number of deadlines so plan participants, beneficiaries, employers and other plan sponsors affected by Hurricane Helene, Tropical Storm Helene, or Hurricane Milton (“covered disasters”) have additional time to make critical health coverage and other benefits decisions. DOL also issued Notice 2024-01 — which grants plan sponsors, fiduciaries and service providers extra time to provide ERISA-required notices and disclosures — and a set of FAQs to help retirement and health plan participants, beneficiaries and sponsors understand their rights and responsibilities. The Department of Health and Human Services (HHS) concurs with the guidance for entities under its jurisdiction (i.e., nonfederal governmental plans and health insurance issuers) to the extent applicable. This GRIST focuses on the relief for health and welfare plans; a separate GRIST reviews relief for retirement plans.

The DOL and Treasury joint notice allows additional time for participants and beneficiaries directly affected by a covered disaster to comply with certain deadlines affecting health and welfare benefits. The relief applies to those directly affected by a covered disaster in Florida, Georgia, North Carolina, South Carolina, and portions of Tennessee and Virginia. The joint notice also gives affected plans and sponsors more time to provide a COBRA election notice to qualified beneficiaries.

Relief for participants and qualified beneficiaries. The Federal Emergency Management Agency (FEMA) established different incident periods for affected areas beginning in late September and early October 2024. The joint notice suspends the following timeframes for affected participants from the first day of the applicable incident period until May 1, 2025 (“relief period”):

• The 30-day period (or 60-day period, if applicable) to request HIPAA special enrollment
• The 60-day COBRA election period
• The date for making timely COBRA premium payments
• The date for individuals to notify the plan of certain COBRA qualifying events or determination of disability
• The dates within which individuals may file (i) a benefit claim, (ii) an appeal of an adverse benefit determination, (iii) a request for an external review, or (iv) information to complete a request for external review under the plan's ERISA claims procedure

According to the agencies, without these extensions, individuals might miss key deadlines that could result in the loss or lapse of group health coverage or the denial of valid benefit claims. Since the first day of the associated incident periods occurred earlier this fall, sponsors may need to apply the relief period retroactively (e.g., to an affected participant whose HIPAA special enrollment request was previously denied as untimely).

Relief for plan sponsors and administrators. Affected plan sponsors and administrators also may disregard the relief period when determining the date for plans to provide a COBRA election notice to qualified beneficiaries.

Under Notice 2024-01, a plan and its responsible fiduciary won’t be treated as violating ERISA for failing to timely deliver any ERISA-required notice, disclosure and other documents due during the relief period, as long as they make a good-faith effort to deliver the notice or disclosure “as soon as administratively practicable.” Plan sponsors may not rely on this to relief to delay notices indefinitely, but won’t be penalized if circumstances make meeting delivery deadlines impossible during the relief period.

E-delivery allowed. As part of a good-faith effort to deliver required documents, plan sponsors and administrators may use electronic-delivery methods, such as text messages, emails or websites, as long as the plan fiduciary reasonably believes recipients have effective access to those means of electronic communication.

Notices and disclosures covered. The relief applies to all notices and disclosures (except those addressed in the DOL and Treasury Department joint notice) required under Title I of ERISA and subject to DOL’s interpretive and regulatory authority. For health and welfare plans, these documents include, for example, summary plan descriptions (SPDs), summaries of material modifications (SMMs), summaries of benefits and coverage (SBCs), the COBRA general notice, the notice of unavailability of COBRA, the notice of early termination of COBRA, the HIPAA special enrollment rights notice, and explanations of benefits (EOBs).

Notice 2024-01 also explains DOL’s general approach to enforcement during the relief period. To prevent loss or undue delay of benefits or claims processing due to failure to meet established deadlines, the notice advises plan fiduciaries to make “reasonable accommodations” for participants and beneficiaries adversely affected by the covered disasters. But DOL understands that plans and service providers may not be able to fully comply with requirements and time frames for claims processing and other actions required by ERISA. As a result, the agency will emphasize compliance assistance (rather than penalties) and provide grace periods and other relief where appropriate. This might occur, for example, when the physical disruption of a plan or service provider’s principal place of business makes it impossible to comply with established deadlines for certain claims decisions or disclosures.

IRS has provided relief until May 1, 2025, for the Form 5500 Annual Return/Report and Form M-1 filings required for multiple employer welfare arrangements (MEWAs) for plan sponsors located in affected areas. Filing relief is available for MEWAs if the relevant office of the MEWA, plan administrator, or primary record keeper serving the MEWA is located in a covered disaster area.

See the following IRS press releases for the specific filing relief in all or portions of the following states:

• Hurricane (and Tropical Storm) Helene

1. Alabama
2. Florida
3. Georgia
4. North Carolina
5. South Carolina
6. Tennessee
7. Virginia

• Hurricane Milton

1. Florida

• Tax relief in disaster situations (IRS, updated regularly)
• Disaster assistance and emergency relief for individuals and businesses (IRS, updated regularly)
• Disaster information (FEMA, updated regularly)
• Guidance and relief under the Public Health Service Act for non-federal governmental plans and health insurance issuers offering health insurance coverage impacted by Hurricane Helene, Tropical Storm Helene, and Hurricane Milton (CMS Insurance Standards Bulletin, Nov. 14, 2024)
• Extension of certain timeframes: Employee benefit plans, participants, beneficiaries, qualified beneficiaries, and claimants affected by Hurricane Helene, Tropical Storm Helene, or Hurricane Milton (Federal Register, Nov. 8, 2024)
• EBSA Disaster Relief Notice 2024-01: Guidance and relief for employee benefit plans impacted by Hurricane Helene, Tropical Storm Helene, and Hurricane Milton (DOL, Nov. 7, 2024)
• FAQs for participants and beneficiaries impacted by Hurricane Helene or Hurricane Milton (DOL,  Nov. 7, 2024)
• IRS provides relief for Milton (IRS, Oct. 11, 2024)
• IRS provides relief for Helene (IRS, Oct. 1, 2024)

• DOL gives retirement plans and participants hurricane relief (Nov. 19, 2024)
• Retirement plan sponsors and participants get hurricane relief (Oct. 11, 2024)

• 10 ways to support employees in an emergency (Oct. 9, 2024)