The Disaster Relief Notice 2021-01 has finally been unveiled by the Employee Benefits Security Administration (EBSA) branch of the U.S. Department of Labor (DOL), with additional coordination and review of the guidance by the Department of Treasury, the Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS). The Notice serves as an official and long-awaited response to the questions surrounding the timeframe to bring the COBRA and HIPAA Outbreak Periods to an end.
Throughout 2020 and thus far in 2021, we discussed the potential scenarios that would occur once the National Emergency Period and subsequent Outbreak Period came to a close. Previously outlined by us here, the National Emergency Period is the subject of fervent interest. Originally implemented by the Trump Administration with an effective date of March 1, 2020, the relief halted the timelines for the COBRA and HIPAA Special Enrollment Periods (encompassing deadlines pertaining to election windows, initial payments, claims and appeals, and grace periods) due to the COVID-19 pandemic. The National Emergency has now come to an unceremonious end. Today’s notice highlights ERISA law and the Internal Revenue Code (IRC) that prohibit a National Emergency Period to last for more than one year.
According to the EBSA guidance, “individuals and plans with timeframes that are subject to the relief under the Notices will have the applicable periods under the Notices disregarded until the earlier of (a) 1 year from the date the were first eligible for relief, or (b) 60 days after the announced end of the National Emergency (the end of the Outbreak Period). On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume. In no case will a disregarded period exceed 1 year.”
In practice, the duration of the relief will essentially ‘un-pause’ the timeframes on a person-by-person basis, based on the “earlier of” either (i) one (1) year from the date an individual was first eligible for relief, of (ii) 60 days after the announced end of the National Emergency (the end of the Outbreak Period).
The examples provided in the guidance, include:
We anticipate that tracking these individual dates will bring forth some degree of strain from an administrative standpoint.
The DOL does recognize that affected plan participants and beneficiaries may continue to encounter an array of problems due to the ongoing nature of the COVID-19 pandemic in circumstances under which relief under the Notices is no longer available due to the statutory one-year limit on the Agencies’ authority to grant relief. The guiding principle for administering employee benefit plans is to act reasonably, prudently, and in the interest of the workers and their families who rely on their health, retirement, and other employee benefit plans for their physical and economic well-being.
Additional links and references:
Employers who encourage their employees to leverage their available paid time off benefits oftentimes realize increased productivity levels amongst their employee population. Paid time off is often...
Since the pandemic, there has been a growing trend of using extended employee paid time off and sabbaticals in the workforce. To avoid any disruptions in productivity within the organization, it is...