(Public Health Emergency Remains in Effect)
Updated May 2023: Contents of this article have been updated to reflect the latest guidance from the agencies. Note that guidance may change with little notice.
President Biden officially declared the end of the COVID-19 National Emergency on April 10, 2023. This came as a surprise to many, as his previous statement indicated the end of the National Emergency would occur May 11th, 2023. In this article, we discuss how Employers and Agents can prepare for the end of the COBRA/continuation coverage "outbreak period"...
After the House voted 229-197 in favor of the decision, H.J. Res. 7 passed the Senate. While signing the bill immediately ended the COVID-19 National State of Emergency originally put into place by President Trump in 2020, the public health emergency (PHE) remains in effect until further notice.
Health insurance, healthcare, and group health plans everywhere will be impacted by the changes under the national emergency cessation.
Employer HR Departments, Insurance Agents, Carriers, and TPAs will have to navigate new waters of administration and employee benefits will change.
COBRA and COBRA-like continuation coverage such as that offered under State law (state continuation) timeframes were extended under the IRS Notice 2021- 1 (through IRS Notice 2021-58) as the agencies allowed for qualified individuals to have extended deadlines for election, special enrollment, and premium payment. The timeframes were "paused" during the "outbreak period" which began March of 2020, and will end 60 days following the declared end of the National Emergency.
These suspended timeframes will essentially cease as of the end of the "outbreak period", which is July 10, 2023. Subsequently, beginning July 11, 2023, all of the suspended deadlines such as those for COBRA election or initial premium due dates, and certain COBRA notices will start to run again. This means Employers will need to take steps to inform their participants of the upcoming deadlines, and Plans will need to account for the time-frames to go back on the pre-COVID clock this summer.
Examples of End Dates for Qualified Beneficiaries:
Ex 1. COBRA Election
A qualified beneficiary who experiences a COBRA QE on April 3, 2023 would typically have 60 days from notification to elect COBRA continuation coverage. Because of the disregarded outbreak period, the typical 60-day election period would be suspended until July 10, 2023 -- 60 days following the declared end of National Emergency. Subsequently, the Qualified Beneficiary's 60 days to elect would not begin until July 10, 2023, allowing the individual to have until September 8, 2023 to elect COBRA/continuation coverage.
Ex 2. COBRA Premium Payment (premium payment)
A qualified beneficiary experiences a COBRA qualifying event and receives a COBRA Election Notice on October 1, 2022. This individual elects COBRA right away, on October 15, 2022 with coverage retroactive to October 1, 2022.
Normally, the individual has 45 days to make the initial premium payment for COBRA continuation coverage, followed by subsequent monthly premium payments. With the suspended timeframes under the "outbreak period", the individual has until 45 days after July 10, 2023, the end of the Outbreak Period, which is August 24, 2023 to make the initial premium payment. The premium payment for any outstanding retro-premiums going back to the October 1, 2022 coverage period would be due no later than August 24th, assuming the qualified beneficiary's coverage was not paid in full.
How Can Employers and Benefits Professionals Prepare?
The early end to the National Emergency complicates communication efforts because the Public Health Emergency and National Emergency related communications could be sent at the same time with the original intended end date of May 11, 2023. However, with each "emergency" to end at different times, Plan sponsors will likely need to send separate communications for the end of extended timeframes.
If your Company needs assistance with navigating the complexities of COBRA continuation administration and the end of the National Emergency, consider outsourcing to an Expert such as CobraHelp. Contact us today!
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