On April 28, 2020, the Department of Labor issued a joint notice with the Department of the Treasury and the Internal Revenue Service that went into effect on May 4, 2020. In summary, the notice extends certain time frames impacting participants’ rights to healthcare coverage, portability, and continuation of group health plan coverage under COBRA and extends the time for participants to file benefit claims or appeals of denied claims.
The timeframe extensions are based on the end date of the “national emergency” and the end date of the “outbreak period.” Although the national emergency end date has not been announced, the end date of the outbreak period is the 60th day after the end of the national emergency. Under the joint rule, the timeframes for COBRA election period, premium payments and notification periods will not begin to run until after the outbreak period has ended.
In the context of COBRA coverage, the impact of the joint rule means that the outbreak period must be “disregarded” (which means the outbreak period is not considered as part of the deadline timeframe), when determining the 60-day COBRA election period. If June 30, 2020 is used as a hypothetical outbreak period end date, this would mean that the 60-day election period for an employee that became COBRA eligible during the outbreak period would be extended to August 29, 2020. Additionally, since health plans under COBRA cannot require payment of premiums before 45 days after the initial COBRA election, the extension of the election period under the joint rule means premium payments may be delayed for some time when compared to when the employee first became eligible.
The rule also makes it clear that the outbreak period must be “disregarded” when calculating the date by which a participant may file a request for an internal appeal after receiving an adverse benefit determination. For example, an employee who received an adverse determination relating to their 401k on April 15, 2020 is notified that they have 60 days to file an appeal. Assuming an outbreak period end date of June 30, 2020, the employee would then have 60 days after the outbreak period end date to file their appeal.
Another example involving a disability plan. An employee receives a notification of an adverse benefit determination from their disability plan on February 15, 2020. The decision advised the employee they had 180 days within which to file an appeal. Assuming again an outbreak period end date of June 30, 2020, under the new rule the outbreak period is disregarded in the appeal period timeframe meaning the employee would need to file their appeal by December 12, 2020. Note that the 180-day extension from the June 30, 2020 outbreak end date is reduced by the 15 days that elapsed between the adverse decision and the start of the outbreak period of March 1, 2020.
- Amy Reasner and Dan Morgan