DOL Releases New FAQs for the Coming End to Extended COBRA Timeframes

The U.S. Department of Labor, HHS, and IRS have jointly released the following FAQ update on COBRA information to address the looming questions about President Biden's anticipated end to the National Emergency effective May 11, 2023. These FAQs will help Employers and health benefits professionals address important aspects of administration as changes to COBRA benefit timeframes and special enrollment timeframes are altered in coming months. 

Extension of Certain Timeframes for Employee Benefit Plans subject to ERISA and the Code, Participants, and Beneficiaries Affected by the COVID-19 Outbreak

On March 13, 2020, the COVID-19 National Emergency was declared, effective March 1, 2020.(21) On May 4, 2020, in response to the COVID-19 National Emergency, DOL, the Department of the Treasury (Treasury Department), and the Internal Revenue Service (IRS) issued the Joint Notification of Extensions of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak (Joint Notice) in the Federal Register.(22) The Joint Notice stated that certain time periods and dates for HIPAA special enrollment, COBRA continuation coverage, and internal claims and appeals and external review must be disregarded (disregarded periods) when determining the due dates for certain elections and other actions by employee benefit plans subject to ERISA and the Code, and participants and beneficiaries of these plans during the COVID-19 National Emergency.(23)

On February 26, 2021, DOL, with the concurrence of HHS, the Treasury Department, and the IRS, issued Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2021-01 (EBSA Notice), which clarified COBRA information that the disregarded periods apply from the date each individual or plan was first eligible for relief under the Joint Notice until the earlier of (a) 1 year from the date they were first eligible for relief, or (b) 60 days after the announced end of the COVID-19 National Emergency. On October 6, 2021, the IRS released Notice 2021-58,(24) which clarified that the disregarded period for an individual to elect COBRA continuation coverage and the disregarded period for the individual to make initial and subsequent COBRA premium payments generally run concurrently.
For the events or circumstances listed below, the relief generally continues until 60 days after the announced end of the COVID-19 National Emergency or another date announced by DOL, the Treasury Department, and the IRS (the "Outbreak Period"). However, as clarified in the EBSA Notice, ERISA(25) and the Code(26) limit the disregarded period for individual actions "required or permitted" by statute to a period of 1 year from the date the action would otherwise have been required or permitted.

Therefore, timeframes to complete elections or other actions subject to the Joint Notice, EBSA Notice, and Notice 2021-58 (together, the emergency relief notices) are extended until 1 year from the date the participant, beneficiary, or plan was first eligible for relief or 60 days after the announced end of the COVID-19 National Emergency (i.e., 1 year after the date they were first eligible or the end date for the Outbreak Period), whichever is earlier. In no case will a disregarded period exceed 1 year. All disregarded periods will end as of the last day of the Outbreak Period.

The disregarded periods extend the following periods and dates:

1. the 30-day period (or 60-day period, if applicable) to request special enrollment,(27)
2. the 60-day election period for COBRA continuation coverage,(28)
3. the date for making COBRA premium payments,(29)
4. the date for individuals to notify the plan of a qualifying event or determination of disability,(30)
5. the date within which individuals may file a benefit claim under the plan’s claims procedure,(31)
6. the date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure,(32)
7. the date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination,(33)
8. the date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete,(34) and
9. the date for providing a COBRA election notice.(35)

The anticipated end of the COVID-19 National Emergency is May 11, 2023. Consistent with previous guidance, DOL, the Treasury Department, and the IRS are also announcing that the disregarded periods under the emergency relief notices will end 60 days after the end of the COVID-19 National Emergency. DOL, the Treasury Department, and the IRS are issuing this FAQ to clarify how the requirements under the emergency relief notices related to disregarded periods for individual actions will change after the COVID-19 National Emergency ends.

Q5. Following the anticipated end of the COVID-19 National Emergency, on what date does the Outbreak Period end?
DOL, the Treasury Department, and the IRS anticipate that the Outbreak Period will end July 10, 2023 (60 days after the anticipated end of the COVID-19 National Emergency). As of the last day of the Outbreak Period, the extensions under the emergency relief notices for timeframes that began during the COVID-19 National Emergency no longer apply. The following examples show how these rules work. These examples assume that the Outbreak Period will end July 10, 2023, as anticipated, and that the group health plan is using the minimum timeframe that the statute permits for individuals to complete certain elections or other actions. However, nothing in the Code or ERISA prevents a group health plan from allowing for longer timeframes for employees, participants, or beneficiaries to complete these actions, and group health plans are encouraged to do so.

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. Individual A should carefully review the COBRA information provided in the COBRA election notice, including any materials from CobraHelp, to understand the coverage options and associated costs.

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. Individual A should carefully review the COBRA information provided and seek assistance from CobraHelp if needed.

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.

Example 5 (Special Enrollment Period)
Facts: Individual C works for Employer Z. Individual C is eligible for Employer Z’s group health plan, but previously declined participation. On April 1, 2023, Individual C gave birth and would like to enroll herself and the child in Employer Z’s plan. However, open enrollment does not begin until November 15, 2023.
When may Individual C exercise her special enrollment rights?
Conclusion: Individual C and her child qualify for special enrollment in Employer Z’s plan as early as the date of the child’s birth, April 1, 2023. Individual C may exercise her special enrollment rights for herself and her child until 30 days after July 10, 2023 (the end of the Outbreak Period), which is August 9, 2023, as long as she pays the premiums for the period of coverage after the birth.

Example 6 (Special Enrollment Period)
Facts: Same facts as Example 5, except that Individual C gave birth on May 12, 2023.
When may Individual C exercise her special enrollment rights?
Conclusion: Individual C and her child qualify for special enrollment in Employer Z’s plan as of the date of the child’s birth, May 12, 2023. Because Individual C became eligible for special enrollment 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. Individual C may exercise her special enrollment rights for herself and her child until 30 days after July 10, 2023 (the end of the Outbreak Period), which is August 9, 2023, as long as she pays the premiums for the period of coverage after the birth.

Example 7 (Special Enrollment Period)
Facts: Same facts as Example 5, except that Individual C gave birth on July 12, 2023.
When may Individual C exercise her special enrollment rights?
Conclusion: Individual C and her child qualify for special enrollment in Employer Z’s plan as of the date of the child’s birth, July 12, 2023. Because Individual C became eligible for special enrollment 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. Individual C may exercise her special enrollment rights for herself and her child until 30 days after July 12, 2023, which is August 11, 2023, as long as she pays the premiums for the period of coverage after the birth.

If you have any additional questions or concerns on COBRA and the COVID-19 National Emergency ending, please reach out to our experts, we are happy to provide more information!
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Sources: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58
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