In February, almost three years after President Trump declared a COVID-19 National Emergency and Public Health Emergency, the Biden Administration announced that the emergency declarations will end May 11, 2023. The end of the National Emergency and Public Health Emergency will impact employers as ERISA-covered group health plan sponsors. Notably certain COBRA and other group health plan timeframes that were extended during the National Emergency will revert back to pre-pandemic rules.
The U.S. Department of Labor, Department of Health and Human Services, and Treasury issued guidance March 29, 2023 clarifying how the requirements for extended timeframes will change after the COVID-19 National Emergency ends.
Background
In April 2020, the U.S. Department of Labor, Internal Revenue Service and Department of Treasury delayed certain ERISA and COBRA-specific 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. The authority under which the government extended the timeframes only allows the relief to last for a maximum one-year period. The first one-year period ended February 28, 2021 but was subsequently renewed for additional one-year periods in 2021 and 2022. The President announced that in 2023, the National Emergency would be renewed only until May 11, 2023.
What Happens Now
The “pause” on COBRA payments and timeframes, along with the time period for HIPAA special enrollments and benefit claims and appeals, will reset 60 days after May 11, 2023, which is July 10, 2023. At that time, all tolled COBRA elections, payments and other extended timeframes that began during the COVID-19 National Emergency will no longer apply.
The following examples, taken directly from the published guidance which is available by clicking here, illustrate the impact on COBRA tolled elections and premium payments.
BAS is prepared to provide COBRA notice and billing services in compliance with this guidance. Information about notifications to COBRA continuants and qualified beneficiaries will be forthcoming.
Example 1 (Electing COBRA)
Facts: Individual A works for Employer X and participates in Employer X’s group health plan. Individual A experiences a qualifying event for COBRA purposes and loses coverage on April 1, 2023. Individual A is eligible to elect COBRA coverage under Employer X’s plan and is provided a COBRA election notice on May 1, 2023.
What is the deadline for Individual A to elect COBRA?
Conclusion: The last day of Individual A’s COBRA election period is 60 days after July 10, 2023 (the end of the Outbreak Period), which is September 8, 2023.
Example 2 (Electing COBRA)
Facts: Same facts as Example 1, except the qualifying event and loss of coverage occur on May 12, 2023, and Individual A is eligible to elect COBRA coverage under Employer X’s plan and is provided a COBRA election notice on May 15, 2023.
What is the deadline for Individual A to elect COBRA?
Conclusion: Because the qualifying event occurred on May 12, 2023, after the end of the COVID-19 National Emergency but during the Outbreak Period, the extensions under the emergency relief notices still apply. The last day of Individual A’s COBRA election period is 60 days after July 10, 2023 (the end of the Outbreak Period), which is September 8, 2023.
Example 3 (Electing COBRA)
Facts: Same facts as Example 1, except the qualifying event and loss of coverage occur on July 12, 2023, and Individual A is eligible to elect COBRA coverage under Employer X’s plan and is provided a COBRA election notice on July 15, 2023.
What is the deadline for Individual A to elect COBRA?
Conclusion: Because the qualifying event occurred on July 12, 2023, after the end of both the COVID-19 National Emergency and the Outbreak Period, the extensions under the emergency relief notices do not apply. The last day of Individual A’s COBRA election period is 60 days after July 15, 2023, which is September 13, 2023.
Example 4 (Paying COBRA Premiums)
Facts: Individual B participates in Employer Y’s group health plan. Individual B has a qualifying event and receives a COBRA election notice on October 1, 2022. Individual B elects COBRA continuation coverage on October 15, 2022, retroactive to October 1, 2022.
When must Individual B make the initial COBRA premium payment and subsequent monthly COBRA premium payments?
Conclusion: Individual B has until 45 days after July 10, 2023 (the end of the Outbreak Period), which is August 24, 2023, to make the initial COBRA premium payment. The initial COBRA premium payment would include the monthly premium payments for October 2022 through July 2023. The premium payment for August 2023 must be paid by August 30, 2023 (the last day of the 30-day grace period for the August 2023 premium payment). Subsequent monthly COBRA premium payments would be due the first of each month, subject to a 30-day grace period.
