Changes are imminent in the COBRA world. While the COVID-19 pandemic is not over, the government-provided extension for COBRA enrollment and payments is about to end.
Background
In April 2020, the U.S. Department of Labor, Internal Revenue Service and Department of Treasury delayed certain COBRA timeframes for employee benefit plans, participants and beneficiaries impacted by the COVID-19 pandemic.
The Final Rule established a new time convention beginning with the start of the COVID-19 National Emergency (March 1, 2020) and ending 60 days after the end of the National Emergency calling this date the “Outbreak Period.” Employee benefit plans subject to ERISA and/or the Internal Revenue Code were required to disregard notice and payment deadlines occurring during the Outbreak Period, including
- the 60-day COBRA election period;
- the 45- or 30-day COBRA premium payment period;
- the employer/plan administrator 30/14 day COBRA election notice period;
- the 30- or 60- day HIPAA special enrollment period; and
- the time periods for filing benefit claims and appeals.
Timing
When the guidance was issued, it was widely believed that the National Emergency would end in 2020 and the full Outbreak Period would last less than one year. In fact, the authority under which the government extended the timeframes only allows the relief to last for a maximum one-year period. That one-year period ends February 28, 2021.
What Happens Now
Commentators are advising that the “pause” on COBRA payments and timeframes (along with the time period for HIPAA special enrollments and benefit claims and appeals) resets February 28, 2021. At that time, all tolled COBRA payments and elections will be re-instated.
There seems to be four options for what happens next:
- A new one-year national emergency extension is issued tolling timeframes through February 28, 2022.
- All timeframes are reinstated as of February 28, 2021.
- An additional 60-day period is given from February 28, 2021 and when that ends, all timeframes are reinstated.
- The one-year extension is applied on an individual-by-individual basis, with tolled timeframes varying by individual.
BAS’ Cobra Control Services will be prepared to support the final approach implemented by the government, including helping employers communicate with their COBRA continuants in an extension period.
