At the 11th hour, on February 26, 2021, the Department of Labor (DOL) issued EBSA Disaster Relief Notice 2021-01 (the “Notice”) to provide guidance on the duration of the COVID-related relief previously provided by the DOL in Notice 2020-01 and by the DOL and IRS in a separate joint notice (the 2020 Notices). Under the 2020 Notices, various timeframes under ERISA and the Internal Revenue Code were to be disregarded, including for purposes of filing claims for benefits, electing and paying for COBRA continuation coverage, and requesting special enrollments. See our previous alert here.
The relief provided in the 2020 Notices began March 1, 2020 and continued until 60 days after the announced end of the COVID National Emergency or such other date announced by the relevant agencies (the “Outbreak Period“). However, by statute, the disregarded period for individual actions was limited to one year from the date the individual action would otherwise have been required or permitted. One year from March 1, 2020 is February 28, 2021. Employers, vendors and other stakeholders have been unclear as to how to apply the limit as the February 28th date approached, as we commented on in our recent blog post here.
End of Suspension Period
Notice 2021-01 states that the timeframes that are subject to the relief under the 2020 Notices will have the applicable periods disregarded until the earlier of:
- One year from the date the individual or plan was first eligible for relief; or
- 60 days after the announced end of the COVID National Emergency.*
In other words, the relief will be applied on an individual-by-individual basis, which is likely to present a host of administrative difficulties for employers. An example in the 2020 Notices provides that if a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the election requirement is delayed until the earlier of one year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.
Individual Accommodation and Notice
In addition to providing that the relief is to be applied on an individual-by-individual basis, the Notice implies that after the relief is no longer available due to the statutory one-year limit, plan administrators should individually notify participants of the end of a relief period and ensure that participants who are losing coverage under an employer-provided plan are aware of other coverage options such as the Health Insurance Marketplace. The Notice states that the guiding principle for administering employee benefit plans is to act reasonably, prudently, and in the interest of the workers and families who rely on their health, retirement and other employee benefit plans for their physical and economic well-being. Accordingly, plan fiduciaries should make reasonable accommodations to prevent the loss or undue delay in payment of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames.
“For example, where a plan administrator or plan fiduciary knows, or should reasonably know, that the end of the relief period for an individual action is exposing a participant or beneficiary to a risk of losing protections, benefits, or rights under the plan, the administrator or fiduciary should consider affirmatively sending a notice regarding the end of the relief period. Moreover, plan disclosures issued prior to or during the pandemic may need to be re-issued or amended if such disclosures failed to provide accurate information regarding the time in which participants of beneficiaries were required to take action….”
Given the DOL's statements, plan administrators should consider communicating the relief provided by this Notice to participants and beneficiaries. In addition, employers should ensure that their vendors will apply the time frames on an individual-by-individual basis.
Originally Published by Seyfarth Shaw, February 2021
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