COBRA Timeframes: Extended Again

Posted by BAS - 03 March, 2021

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The Employee Benefits Security Administration issued Disaster Relief Notice 2021-01 on February 26, 2021 requiring an ongoing suspension of COBRA deadlines that come due during the COVID-19 National Emergency. The new guidance suspends COBRA election, payment and notice dates on an individual-by-individual, rolling basis with tolled timeframes varying by person up to a maximum one-year period. The suspension applies not only to currently extended timeframes, but also to new, ongoing timeframes.

A period of time equal to the lesser (a) one year or (b) 60 days after the end of the National Emergency must be disregarded in determining a COBRA election or payment due date. A copy of the notice may be accessed by clicking here.

What this means for plans subject to federal COBRA:

  • Electing COBRA. Instead of having 60 days from a qualifying event (or issuance of notice, if later) to elect COBRA, a qualified beneficiary’s election due date is suspended. The qualified beneficiary now has 60 days plus a period of time equal to the lesser (a) one year or (b) 60 days after the end of the National Emergency to elect.
  • First Payment for COBRA. Instead of having 45 days from election to make a first payment for COBRA, a continuant’s first payment due date is suspended. The continuant now has 45 days plus a period of time equal to the lesser (a) one year or (b) 60 days after the end of the National Emergency to make a first COBRA payment.
  • Ongoing Monthly Payment for COBRA. Instead of monthly premiums being due the first of the month for that month of coverage with a 30-day grace period, the continuant’s monthly premium due date is suspended. The continuant now has an additional period of time equal to the lesser (a) one year or (b) 60 days after the end of the National Emergency to make an ongoing monthly COBRA premium payment.

Employer Considerations:

The guidance strongly encourages employers to communicate with individuals about the new rules governing the maximum time periods during which their payment/election dates will be suspended. This outreach is suggested as part of an employer’s fiduciary duty, as the lapse of a COBRA election or payment period could cause the individual to lose out on the ability to have health coverage. Communication should be sent to individuals who received prior COBRA communications without the new timeframes.

Employers will have to decide if they will maintain coverage when a continuant does not pay by the initial due date (but has an extended time to pay) or if they will terminate coverage and reinstate if payment is made within the extended timeframe. Before making a decision, employers with insured plans will want to understand the options recognized by their insurers.

BAS/Cobra Control Services Approach:

BAS has already programed its MyEnroll360 COBRA module to apply the suspension period on a rolling, individual-by-individual basis. Qualifying event letters, non-payment letters and end of election period letters have been updated with the new rules.

BAS will be sending final non-payment and non-election letters based on the 1-year rolling period.

BAS will help employers satisfy their fiduciary duty by sending letters to existing continuants explaining the new suspension periods as they relate to payment and election period due dates. BAS will contact clients with pricing.

For information on BAS’ COBRA services, contact service@CobraControl.com or call 1.888.887.6187.

Topics: COBRA, HR & Benefits Compliance, Covid, coronavirus resources


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