DOL Issues Guidance on Benefit Plan Deadline Extensions

On February 26, 2021, the DOL issued Disaster Relief Notice 2021-01 related to the mandatory time frame extensions for certain employee benefit compliance requirements that was issued earlier during the Covid-19 national emergency. Under the new guidance, COBRA, HIPAA Special Enrollment, claims and appeals timeframes, and other applicable deadlines will begin to calculate when the “Outbreak Period” ends, which will be the earlier of a) one year from the date the deadline would have begun running; or b) 60 days after the National Emergency declared for the COVID-19 pandemic ends.

Relief for Plan Participants, Beneficiaries, Qualified Beneficiaries, and Claimants

The original relief required that health and retirement plans disregard the “Outbreak Period” before imposing the following plan deadlines:

• The 30-day period (or 60-day period, if applicable) to request special enrollment under HIPAA
• The 60-day election period for COBRA continuation coverage
• The date for making COBRA premium payments
• The date for individuals to notify the plan of a qualifying event or determination of disability
• The date within which individuals may file a benefit claim under the plan's claims procedure
• The date within which claimants may file an appeal of an adverse benefit determination under the plan's claims procedure pursuant
• The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination
• The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.

The prior guidance defined the “Outbreak Period” as the time between March 1, 2020, and 60-days following the official end of the National Emergency. Due to statutory limitations, the Agencies ability to suspend deadlines is limited to one year. To resolve the conflict between the prior guidance and the statutory limitations, Disaster Relief Notice 2021-01 provides that the “Outbreak Period” applies on an individual-by-individual basis and ends the earlier of:

• One year from the date the deadline would have begun running for that individual; or
• 60 days from the end of the National Emergency (which is still ongoing).

At that time, the deadlines that were paused under the relief will resume. Further, the guidance emphasizes that in no case, will the disregarded period (“Outbreak Period”) exceed 1 year.

To help illustrate the new requirements, the Notice provides the following examples. If a qualified beneficiary, for example, would have been required to make a COBRA election by March 1, 2020, the Notice delays that requirement until February 28, 2021, which is the earlier of 1 year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing). Similarly, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the Notice delays that election requirement until the earlier of 1 year from that date (i.e., March 1, 2022) or the end of the Outbreak Period. Likewise, if a plan would have been required to furnish a notice or disclosure by March 1, 2020, the relief under the Notice would end with respect to that notice or disclosure on February 28, 2021.

Next Steps:

Employers should check with their benefits and COBRA TPAs for information on how this new guidance will be implemented. Paylocity’s Spending Accounts and COBRA Services Team is working to implement the new guidance. If you have questions, please contact your dedicated Support Specialist.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.