Information and News – COBRA Management Services

COVID-19 National Emergency 2023 Final Update

Updated May 1, 2023

Issue Date: April 2023

COVID-19 National Emergency Update

On October 6, 2021 the IRS released new guidance, IRS Notice 2021-58, that further explained the application of extensions for the election of COBRA and payment of COBRA as set forth on May 4, 2020 in response to the COVID-19 National Emergency.

The guidance clarified that the disregarded period for a participant to elect COBRA continuation coverage and the disregarded period for the participant to make initial and subsequent COBRA premium payments generally run concurrently. Participants have until (1) up to one year and 60 days after the participant’s receipt of the COBRA election notice or (2) 60 days after the end of the Outbreak Period , whichever is earlier, to make the COBRA election and initial payment.

On February 10, 2023, Joe Biden announced that he plans to end the COVID-19 National Emergency on May 11, 2023.

The Departments of Labor (DOL), Health and Human Services, and the Treasury issued guidance on March 29, 2023, providing awareness and clarity to changes that will accompany the end of the National Emergency and how those changes will impact the COBRA grace period extensions and the outbreak period.

Recently the US Senate passed a bill that, if signed by Biden, will end the National Emergency immediately.

Extensions and the Outbreak Period
The March 29, 2023 guidance clarifies that with the anticipated end of the National Emergency on May 11, 2023, the Outbreak Period will end July 10, 2023 (60-days after the anticipated end of the National Emergency). The extensions under the emergency relief for timeframes that began during the National Emergency no longer apply. As clarified in 2021, the disregarded period was permitted to a period of 1 year from the first date of eligibility for the relief or the announced end of the outbreak period, whichever occurred first.

Further clarification in the March 29, 2023 guidance states that individuals, in some circumstances, will still be permitted a minimum timeframe to complete elections, initial payments, and subsequent payments. See examples below, assuming the National Emergency end date is May 11, 2023.

COBRA Election Outbreak Period:

COBRA SRN Date: 5/1/2023
“Normal” time period for making election: 60 days
Outbreak End (7/10/2023) + 60 days =9/8/2023

COBRA Election Outbreak Period, After the end of the National Emergency:

COBRA SRN Date: 5/12/2023
“Normal” time period for making election: 60 days
Outbreak End (7/10/2023) + 60 days = 9/8/2023

COBRA Election – 1 year

COBRA SRN Date: 5/30/2022
“Normal” Elect by Date (60 days): 7/29/2022
7/29/2022 + 365 days =7/29/2023

Initial Payment Outbreak Period:

COBRA SRN Date: 10/01/2022
Participant Elected: 10/15/2022
“Normal” time period for making the initial payment: 45 days
Outbreak End (7/10/2023) + 45 days = 8/24/2023

Subsequent Payment Outbreak Period:

First Day of Coverage: 7/01/2022
Participant Paid Thru 9/30/2022, takes the extension
Premium Month Owed: 10/1/2022
“Normal” time period for making subsequent payments: 30 days
Outbreak End (7/10/2023) + 30 days = 8/09/2023
Required Premiums: October 2022 – July 2023

What does this mean to our clients?

Business As Usual
Since our organization did not use any auto-extension functionality in our COBRA system, we will continue to operate as normal. Participants will continue to submit appeals for late payments that are reviewed by our compliance team; moving forward however, they will not automatically be approved due to the Federal payment extensions.

COVID-19 National Emergency – Status

Updated March 1, 2023

Issue Date: February 2023

COVID-19 National Emergency Update

On February 10th, President Biden announced that he plans to end the two COVID-19 national emergencies on May 11, 2023. While this is the Administration’s current plan, it is subject to change and the Administration has not released further details about ending the national emergencies.

AccrueCMS has been preparing for the end of the national emergencies and will continue to monitor and communicate any new information released. While we await an update, we’re including some information that might be beneficial in planning for the official end to the declaration.

COBRA

The end of the COVID-19 national emergency will end the extensions first announced in EBSA Disaster Relief Notice 2020-01, which provided qualified beneficiaries and COBRA members with more time to send certain notifications about COBRA coverage, to elect COBRA, and to make premium payments. The temporary extensions were retroactive to any deadline occurring March 1, 2020 until 60 days after the COVID-19 national emergency is declared over or until one year has passed, whichever occurred first.

FSAs and HRAs

EBSA Disaster Relief Notice 2020-01 also granted a temporary extension to run-out periods for flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs). The extension gives participants additional time to submit claims for any active plan year they are enrolled in that has a run-out period ending between March 1, 2020 and 60 days after the COVID-19 national emergency is declared over , whichever occurred first.

Biden Administration Extends National Emergency for Another Year

Updated March, 2022

Issue Date: February 2022

Introduction

On February 18, 2022, President Biden formally extended the COVID-19 National Emergency for up to another year. The National Emergency first went into effect on March 1, 2020, and after being first extended in February 2021, was set to expire on March 1, 2022.

Background

After a National Emergency was declared as of March 1, 2020, regulatory agencies jointly issued a final rule in April extending several specific notice and disclosure deadlines applicable under HIPAA, COBRA, and ERISA. The rule effectively extended the time participants were given for things like COBRA elections, COBRA payments, HIPAA special enrollments, and ERISA claims filing and appeals. In addition to the final rule, the DOL issued Disaster Relief Notice 2020-01, granting some leniency regarding enforcement of the timing and delivery method for plan sponsor disclosures required under ERISA. The rules apply broadly to all employer-sponsored benefits subject to ERISA and COBRA. The Department of Health & Human Services (HHS) indicated that similar relief was available to non-federal governmental plans as well.

For the period of time beginning March 1, 2020, until 60 days after the National Emergency is over (the “Outbreak Period”), all group health plans, disability plans, other employee welfare benefit plans, and employee pension plans must disregard this time period when administering plans with respect to notices, disclosures and other deadlines covered by the rule.

Conclusion

This most recent extension of the National Emergency further extends the duration of the Outbreak Period. It is possible that President Biden will end the National Emergency before another year passes, but this remains to be seen. Plan sponsors should be aware that the extended deadlines for participants under HIPAA, COBRA, and ERISA remain in effect for the time being and ensure that their plans continue to operate in accordance with the requirements for any deadlines.

EBSA Disaster Relief Notice Update 2021-01

Updated March 10, 2021

The Department of Labor on February 26, 2021 issued EBSA Disaster Relief Notice 2021-01, which lays out clarifying guidance on the length of COVID-19 relief allowed by the Timeline Extension Rule.

Under previous guidance issued in April 2020, various deadlines were extended by disregarding the period between March 1, 2020, and 60 days after the end of the national emergency. Also referred to as the outbreak period, it fundamentally acts as a pause button for calculating various time frames; such as the 60-day election period for COBRA and the 30 – or 60-day period to request special enrollment under HIPAA.

Under the new guidance described in EBSA Disaster Relief Notice 2021-01, the DOL clarified that the outbreak period will certainly continue until 60 days after the end of the national emergency.

However, the DOL also recognizes that individual extensions are limited to a one-year period by statute. Therefore, as explained in the Notice, while the time frame extensions will continue beyond February 28, they will be applied on an individual basis, and in no case will any individual extension go beyond one year.

Examples:

If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the relief delays that requirement until February 28, 2021, which is the earlier of one 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, that election requirement would be delayed 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 would end with respect to that notice or disclosure on February 28, 2021. The responsible plan fiduciary would be required to ensure that the notice or disclosure was furnished on or before March 1, 2021. In all of these examples, the delay for actions required or permitted that is provided by the Notices does not exceed 1 year.

EBSA Disaster Relief Notice 2020-01

COBRA Deadline Extensions

Updated May 12, 2020

On April 28, 2020, the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued guidance providing significant deadline extensions and other relief to assist employee benefit plans, plan participants and beneficiaries, employers and other plan sponsors, plan fiduciaries, and other service providers impacted by the COVID-19 outbreak. The guidance applies to health and welfare plans and retirement plans and follows the March 13, 2020 declaration of a federal emergency resulting from the COVID-19 pandemic.

The CARES Act (COVID-3 Stimulus Bill)

Updated March 31, 2020

The “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” was signed into law on March 27, 2020. What exactly does this mean? This new bill contains many employee benefit-related items. The revisions permanently reinstate coverage of over-the-counter (OTC) drugs and medicines as eligible for reimbursement from FSAs, HRAs, and HSAs without the necessity of a prescription, assuming the employer’s plan documents allow so. It further expands the definition of qualified OTC items to include eligible menstrual care products that can be purchased with these funds. This change is effective for expenses incurred on or after January 1, 2020.

As the industry makes this important transition, the implementation of the new eligible item list will gradually occur over the next 4-6 weeks.

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