Legal Impact of Coronavirus

By Joshua M. Osborne and Alexandra A. Ifrah

Continuing with ongoing efforts to provide relief during this COVID-19 National Emergency, the Internal Revenue Service, Department of Labor, Treasury Department and EBSA (the “Agencies”) have issued new joint guidance extending certain timeframes under ERISA and the Internal Revenue Code that apply to group health, disability and other welfare plans, and retirement plans as well as the participants/beneficiaries of those plans during this National Emergency.

Pursuant to this guidance, group health, disability and other welfare benefit plans as well as retirement plans (with respect to claims procedures) will be required to disregard the time period beginning March 1, 2020 and ending 60 days after the announced end of the National Emergency (the “Outbreak Period”) when determining a participant’s or beneficiary’s compliance with any of the following deadlines or timeframes:

HIPAA Special Enrollment – The 30 day period to request enrollment on account of a change in family status (i.e., marriage, birth, adoption, placement for adoption) or on account of loss of other health coverage; 

• Example: Employee A was eligible for but declined group health plan coverage during the open enrollment period. On April 30, 2020, Employee A gives birth and would like to enroll herself and her child in the employer’s plan. If we assume the National Emergency is lifted on May 31, 2020, the Outbreak Period will end on July 30, 2020. Because the entire Outbreak Period is disregarded for purposes of Employee’s special enrollment rights, she will have 30 days after July 30, 2020, which is August 29,2020, to enroll herself and her child.

CHIPRA – The 60 day period to request or change enrollment for loss of Medicaid or CHIP coverage or on account of becoming eligible for state premium assistance subsidy;

COBRA Elections – The 60 day period to elect COBRA continuation coverage following the receipt of the COBRA Election Notice

• Example: Employee B is a participant in Employer X’s group health plan. Employee B experiences a reduction in hours that results in a loss of eligibility for coverage in the group health plan. Employer X provides the COBRA Election Notice on April 1, 2020. If we assume the National Emergency ends on May 31, 2020, the Outbreak Period would end on July 30, 2020. Because the Outbreak Period is disregarded in determining the deadline for electing COBRA coverage, the COBRA election period is 60 days after July 30, 2020 which is September 28, 2020.

COBRA Premiums – The 45 day deadline for paying the initial premium as well as the deadline for making subsequent premiums including the 30-day grace period for missed premium payments. In other words, COBRA continuation coverage cannot be cancelled for nonpayment of premiums during the Outbreak Period.

• Example: Individual C begins COBRA continuation coverage on March 1, 2020. More than 45 days have passed since Individual C’s election of COBRA. COBRA premiums are due at the first of each month and COBRA beneficiaries are given the standard 30 day grace period for paying premiums. Individual C timely pays the February premium but does not make any premium payments in March, April, May or June. If we assume the National Emergency ends on May 31, 2020, the Outbreak Period would end on July 30, 2020. Because the Outbreak Period is disregarded in determining the deadline for making COBRA premium payments, Individual C has 30 days after July 30, 2020 to make up the missed premiums. Since the due date for making the COBRA premiums was postponed during the Outbreak Period, Individual C is eligible to receive coverage under the plan during the Outbreak Period (plus the 30-day grace period). However, the guidance indicates that although the plan may not deny coverage during this time, the plan may make retroactive payments for benefits and services received by Individual C during this time (assuming Individual C makes up the required monthly premiums). Alternatively, if Individual C only makes premiums payments for March and April before the end of the grace period ending August 29, 2020, coverage for Individual C under the plan would only be effective for March and April and the plan would not be obligated to cover benefits or services after April 30, 2020.
  

- COBRA Qualifying Event Notice – The 60 day deadline required for an employee or dependent to notify the plan of a COBRA qualifying event on account of the spouse’s loss of eligibility for divorce or legal separation or for a child losing dependent status;

- Disability Determination – The COBRA qualified beneficiary’s 60 day notification deadline to qualify for extension of COBRA coverage on account of an SSA disability determination;

- Initial Claims - The deadline for submitting an initial claim for benefits as determined by the plan’s claims procedures

- Claims Appeals – The deadline for submitting an appeal of an adverse benefit determination (typically 180 days for health and disability plans and 60 days for other types of plans);

- External Review Request – The four month period after the receipt of an adverse benefit determination or final adverse benefit determination in which to submit a request for external review

- Incomplete External Review Request – The deadline to complete an external review request after receiving a notice that the request is incomplete.

In addition to the relief afforded to participants/beneficiaries, the guidance provides some relief to group health plans in connection with the deadline for providing a COBRA Election Notice. Generally, plans must provide a COBRA Election Notice to COBRA qualified beneficiaries within 44 days of a qualifying event. However, under the newly issued guidance, the Outbreak Period will be disregarded in determining the timeliness of such notice.

Finally, it should be noted that the Agencies indicated that they will continue to monitor the impact of this National Emergency and may provide additional relief in the future if they deem necessary.