Many Participant Timing Requirements Tolled; New Model COBRA Notices Issued
The Department of Labor (“DOL”) has announced several updates that will impact virtually all welfare benefit plans. These announcements generally fall into two categories: (1) tolling of deadlines for many welfare benefit plan participant elections and actions; and, (2) COBRA notices. Below is a summary of this new guidance and links to the notices, FAQs, and related information.
Tolling of Timing Requirements
The DOL has extended (or tolled) the time requirements relating to COBRA continuation coverage elections and certain notices, as well as to special enrollment rights and welfare plan claims and appeals, which are described below. The tolling of these timing requirements will last from March 1, 2020, until 60 days after the federal government declares the national emergency from COVID-19 to have ceased. This temporary change will result in a substantial amount of additional time for participants.
There are a few key considerations to keep in mind. First, participants are permitted to act during the normal time requirement but are now given an additional amount of time to act, as described below. Second, the guidance provides examples that list April 30, 2020, as the end date of the national emergency, but this is only for example purposes since the state of emergency has not yet been declared over. Third, employers and plan sponsors should discuss the changes with their legal counsel to determine what, if any, information needs to be disclosed to participants and what the most effective way of doing so may be for their plan and circumstances.
The following is a list of what is being tolled. For each, the normal period is being suspended or tolled from March 1, 2020, until 60 days after the federal government declares the national emergency to have ended:
- Elect COBRA continuation coverage (such as upon termination of employment or reduction of hours).
- Make COBRA premium payments.
- Provide notice of certain COBRA events (divorce, disability, when a child covered by the plan reaches age 26).
- HIPAA Special Enrollment Rights (such as when there is loss of other group coverage or a new dependent (spouse or child) enters the family (marriage, birth, adoption), or becoming eligible for or losing coverage under Medicaid.
- ERISA welfare plans claims and appeals of claim denials. This does not change that the employer and plan sponsor still need to follow the terms of the plan regarding the timing of their notices and actions because only the participant timing has been altered by the DOL guidance. The same tolling period will also apply to requests for and the provision of information for an external review.
As this suspension of the timing rules is new for employer and plan sponsors, they should discuss what changes and what information needs to be provided to participants. You can contact any member of the employee benefits group to obtain more information and guidance on how to proceed, especially as participants start exercising these newly available options.
New model COBRA Continuation Coverage Notices (“Notices”) have been published and are ready for immediate use. The Notices reflect updated guidance. The updates include an updated general notice to be provided when participants are first eligible for and participate in a group health plan subject to COBRA and a COBRA election notice for when eligible participants may elect COBRA Continuation Coverage. As with previous versions, employers and plan sponsors are permitted to use their notices.
New COBRA FAQs were also released. These primarily relate to enrollment in Medicare, and how Medicare and COBRA coordinate benefits.
To obtain the model notices or the other guidance, click below: