Coronavirus Pandemic Disaster Relief & Outbreak Period Guidance
As It Pertains to COBRA Administration
Update April 2023: Biden Ends the National Emergency Early, causing "outbreak period" to come to an end in 2023. Click here to learn more.
In May, 2020, the U.S. Department of Labor and Department of the Treasury released new guidance for Employers and Plan Administrators on how the Coronavirus impact on COBRA beneficiaries would be addressed. In short, the new rule extended/suspended typical COBRA timeframes for notification, election, initial payment, and regular monthly ongoing premium payment to offer leniency to COBRA beneficiaries during the pandemic.
The original "Outbreak Period" was deemed March 1st of 2020, and the extensions to the typical COBRA timeframes were set to end 60 days after the declared end of the Outbreak Period (end of National State of Emergency), or at the end of a 12 month period (the legal limit for Federal law adjustments such as this one). That 12 month period ended March 1st, 2021, and the Coronavirus National State of Emergency (aka Outbreak Period) remains ongoing. This prompted the DOL to release new guidance for Employers and Plan Sponsors for 2021, as it pertains to benefits administration.
On this page we have provided resources and information about these employee benefits administration updates that impact COBRA beneficiaries to help Employers, Brokers, and TPA's navigate the administrative challenges and HR compliance strategies imperative to successful, accurate COBRA administration.
March 2021 - DOL's IRS Notice of Disaster Relief Here
Updated: Departments Release Notice 2021-58
The DOL now says that every individual gets an extension to take those actions based on when their COBRA, special enrollment, or claims event occurred, rather than a single extension for all people and events. This means, for each event, the Outbreak Period will end on the earlier of:
One year after it starts for that event; or 60 days after the national emergency declared for the COVID-19 pandemic ends. (President Biden recently extended the national emergency, so it is still ongoing, which means the extension provisions to the original Joint Final Rule of 2020, creates new challenges for administrators.)
Who Does It Apply To?
These extensions apply to the following actions:
For COBRA:
The 60-day COBRA election;
The 45-day period to submit initial COBRA premium payment, once COBRA is elected;
The 30-day grace period for a COBRA qualified beneficiary to make monthly premium payments;
The date for individuals to notify the plan of COBRA qualifying events (such as Divorce).
For HIPAA special enrollment rights, the 30- or 60-day time period to make election changes;
and For ERISA claims deadlines: filing a claim; appealing a clam denial; requesting external review; and filing information needed to complete/perfect an external review request.
The original "Outbreak Period" was deemed March 1st of 2020, and the extensions to the typical COBRA timeframes were set to end 60 days after the declared end of the Outbreak Period (end of National State of Emergency), or at the end of a 12 month period (the legal limit for Federal law adjustments such as this one). That 12 month period ended March 1st, 2021, and the Coronavirus National State of Emergency (aka Outbreak Period) remains ongoing. This prompted the DOL to release new guidance for Employers and Plan Sponsors for 2021, as it pertains to benefits administration.
On this page we have provided resources and information about these employee benefits administration updates that impact COBRA beneficiaries to help Employers, Brokers, and TPA's navigate the administrative challenges and HR compliance strategies imperative to successful, accurate COBRA administration.
March 2021 - DOL's IRS Notice of Disaster Relief Here
Updated: Departments Release Notice 2021-58
The DOL now says that every individual gets an extension to take those actions based on when their COBRA, special enrollment, or claims event occurred, rather than a single extension for all people and events. This means, for each event, the Outbreak Period will end on the earlier of:
One year after it starts for that event; or 60 days after the national emergency declared for the COVID-19 pandemic ends. (President Biden recently extended the national emergency, so it is still ongoing, which means the extension provisions to the original Joint Final Rule of 2020, creates new challenges for administrators.)
Who Does It Apply To?
These extensions apply to the following actions:
For COBRA:
The 60-day COBRA election;
The 45-day period to submit initial COBRA premium payment, once COBRA is elected;
The 30-day grace period for a COBRA qualified beneficiary to make monthly premium payments;
The date for individuals to notify the plan of COBRA qualifying events (such as Divorce).
For HIPAA special enrollment rights, the 30- or 60-day time period to make election changes;
and For ERISA claims deadlines: filing a claim; appealing a clam denial; requesting external review; and filing information needed to complete/perfect an external review request.
Helpful Examples of COBRA Deadline Suspensions Under Disaster Relief Notice 2021-01:
(Based on Disaster Relief Notice 2021-01 as issued 2/26/2021. Subsequent guidance may alter the results in these examples.)
In these examples, the “Outbreak Period” is the suspension that began March 1, 2020 and will end 60 days after the COVID National Emergency is declared at an end. Note that the end of the National Emergency (and therefor the end of the Outbreak Period) may vary by location.
Affected compliance deadlines: COBRA elections are normally due within 60 days of the date of the election notice. The initial COBRA premium payment is normally due within 45 days thereafter. Ongoing COBRA premium payments are normally due at the beginning of the month and must be paid within the 30-day grace period that follows. Qualified beneficiaries must normally notify the Plan Administrator of a divorce, a child’s loss of dependent status, or determination of disability within 60 days of those events. Qualified beneficiaries may have rights under other laws applicable to active employees such as special enrollment rights that are also affected by the Disaster Relief Notice.
The affected compliance deadlines are now suspended until the earlier of:
(A) one year from the date the individual’s originally required due date (before relief was extended), or
(B) the end of the official “Outbreak Period” (defined as the end of the National Emergency plus 60 days) PLUS the portion of any applicable compliance period (i.e., 60-day COBRA election, 45- and 30-day COBRA payment, etc.) that would have run on or after March 1, 2020.
Special Note: Because the end of the Outbreak Period can result in a shorter suspension than the maximum one-year suspension period, individuals should be alert to the declaration of the end of the National Emergency in their location. When that is publicized in the media, the Outbreak Period will end 60 days later, which may or may not be prior to the end of the maximum one-year period for the particular compliance requirement in issue.
EXAMPLES
COBRA Events before March 1, 2020 (i.e., prior to the Outbreak Period)
Example 1: Bob experiences a loss of employment. His 60-day COBRA election period would have expired on April 1, 2020. Under the Outbreak Period relief, his 60-day deadline is suspended after 28 days on March 1, 2020. Because the Outbreak Period has not yet ended as of April 1, 2021, Bob was required to submit his election no later than April 1, 2021, which is the earlier of (A) one year from the original due date for the election, or (B) the end of the Outbreak Period plus the 32 days left in the original 60-day compliance period. If the Outbreak Period had ended February 15, 2021, Bob’s 60-day election deadline would have been March 19, 2020 (32 days after the end of the Outbreak Period).
Example 2: Sara commenced COBRA continuation in September 2019 under her former employer’s medical plan. Two weeks into the new plan year, on January 15, 2020, she married Ben. If Sara wanted to add Ben to her medical coverage, she would need to request a special enrollment within 30 days on or before February 14, 2020. Because that deadline expired before March 1, 2020, it is not extended under the suspension rules. Had the 30 days ended on March 1, 2020 (the first day of the Outbreak Period relief), the deadline would have been suspended until March 1, 2021, one year from the original due date for giving notice on March 1, 2020.
COBRA Events between March 1, 2020, and February 28, 2021 (During the Outbreak Period up to 2/28/2021)
Example 3: Continuing Example 1, above, Bob submits his COBRA election postmarked on February 29, 2020. His first premium payment would have been due within 45 days on April 14, 2020, within the Outbreak Period. Under the Outbreak Period relief, all 45 days of the payment period falling on and after March 1, 2020, are suspended. Because the Outbreak Period has not yet ended as of April 14, 2021, Bob would not be required to make his initial COBRA premium payment until April 14, 2021, which is the earlier of (A) one year from the original due date for the payment, or (B) the end of the Outbreak Period plus the 45 days of his original 45-day compliance period. If the Outbreak Period ended May 31, 2021, Bob’s 45-day initial payment deadline would be July 15, 2021 (45 days after the end of the Outbreak Period). (NOTE: Bob may be required to pay his COBRA premiums prior to receiving medical care during his COBRA continuation period.)
Example 4: Sofia experiences a loss of employment. Her 60-day election period would have expired on September 1, 2020, during the Outbreak Period. Under the Outbreak Period relief, her entire 60-day election period is suspended. Because the Outbreak Period has not yet ended as of April 1, 2021, Sofia would be required to submit her election no later than September 1, 2021, which is the earlier of
(A) one year from the original due date for the election, or (B) the end of the Outbreak Period plus the 60 days of her original 60-day compliance period. If the Outbreak Period ended May 31, 2021, Sofia’s 60-day election deadline would be July 30, 2021 (60 days after the end of the Outbreak Period).
COBRA Events after February 28, 2021, until the Outbreak Period Ends (Presently unknown)
Example 5: Shonda experiences a loss or employment. Her 60-day COBRA election period would normally expire on August 31, 2021. If the Outbreak Period has not ended, Shonda’s entire 60-day deadline is suspended under the Outbreak Period relief, and Shonda would not be required to submit her election until August 31, 2022, which is the earlier of (A) one year from the original due date for the election, or (B) the end of the Outbreak Period plus the 60 days left in her original 60-day compliance period. If the Outbreak Period ends July 31, 2021, Shonda’s 60-day election deadline would resume and expire on September 29, 2021 (60 days after the end of the Outbreak Period, which would be earlier than August 31, 2022).
Example 6: Lee elects COBRA after losing coverage due to a reduction of hours and commences coverage effective May 1, 2021. He obtains a Social Security determination of disability on May 31, 2021 and would normally be required to notify the Plan Administrator of that determination within 60 days (by July 30, 2021) so he could extend his COBRA continuation to 29 months. If the Outbreak Period has not ended, Lee’s 60-day deadline is suspended under the Outbreak Period relief, and he would not be required to submit his disability notice until July 30, 2022, which is the earlier of (A) one year from the original due date for the notice, or (B) the end of the Outbreak Period plus the 60 days left in his original 60-day notification period. If the Outbreak Period ends July 31, 2021, Lee’s 60-day election deadline would resume on that date and expire on September 29, 2021 (60 days after the end of the Outbreak Period, which would be earlier than July 30, 2022).
In these examples, the “Outbreak Period” is the suspension that began March 1, 2020 and will end 60 days after the COVID National Emergency is declared at an end. Note that the end of the National Emergency (and therefor the end of the Outbreak Period) may vary by location.
Affected compliance deadlines: COBRA elections are normally due within 60 days of the date of the election notice. The initial COBRA premium payment is normally due within 45 days thereafter. Ongoing COBRA premium payments are normally due at the beginning of the month and must be paid within the 30-day grace period that follows. Qualified beneficiaries must normally notify the Plan Administrator of a divorce, a child’s loss of dependent status, or determination of disability within 60 days of those events. Qualified beneficiaries may have rights under other laws applicable to active employees such as special enrollment rights that are also affected by the Disaster Relief Notice.
The affected compliance deadlines are now suspended until the earlier of:
(A) one year from the date the individual’s originally required due date (before relief was extended), or
(B) the end of the official “Outbreak Period” (defined as the end of the National Emergency plus 60 days) PLUS the portion of any applicable compliance period (i.e., 60-day COBRA election, 45- and 30-day COBRA payment, etc.) that would have run on or after March 1, 2020.
Special Note: Because the end of the Outbreak Period can result in a shorter suspension than the maximum one-year suspension period, individuals should be alert to the declaration of the end of the National Emergency in their location. When that is publicized in the media, the Outbreak Period will end 60 days later, which may or may not be prior to the end of the maximum one-year period for the particular compliance requirement in issue.
EXAMPLES
COBRA Events before March 1, 2020 (i.e., prior to the Outbreak Period)
Example 1: Bob experiences a loss of employment. His 60-day COBRA election period would have expired on April 1, 2020. Under the Outbreak Period relief, his 60-day deadline is suspended after 28 days on March 1, 2020. Because the Outbreak Period has not yet ended as of April 1, 2021, Bob was required to submit his election no later than April 1, 2021, which is the earlier of (A) one year from the original due date for the election, or (B) the end of the Outbreak Period plus the 32 days left in the original 60-day compliance period. If the Outbreak Period had ended February 15, 2021, Bob’s 60-day election deadline would have been March 19, 2020 (32 days after the end of the Outbreak Period).
Example 2: Sara commenced COBRA continuation in September 2019 under her former employer’s medical plan. Two weeks into the new plan year, on January 15, 2020, she married Ben. If Sara wanted to add Ben to her medical coverage, she would need to request a special enrollment within 30 days on or before February 14, 2020. Because that deadline expired before March 1, 2020, it is not extended under the suspension rules. Had the 30 days ended on March 1, 2020 (the first day of the Outbreak Period relief), the deadline would have been suspended until March 1, 2021, one year from the original due date for giving notice on March 1, 2020.
COBRA Events between March 1, 2020, and February 28, 2021 (During the Outbreak Period up to 2/28/2021)
Example 3: Continuing Example 1, above, Bob submits his COBRA election postmarked on February 29, 2020. His first premium payment would have been due within 45 days on April 14, 2020, within the Outbreak Period. Under the Outbreak Period relief, all 45 days of the payment period falling on and after March 1, 2020, are suspended. Because the Outbreak Period has not yet ended as of April 14, 2021, Bob would not be required to make his initial COBRA premium payment until April 14, 2021, which is the earlier of (A) one year from the original due date for the payment, or (B) the end of the Outbreak Period plus the 45 days of his original 45-day compliance period. If the Outbreak Period ended May 31, 2021, Bob’s 45-day initial payment deadline would be July 15, 2021 (45 days after the end of the Outbreak Period). (NOTE: Bob may be required to pay his COBRA premiums prior to receiving medical care during his COBRA continuation period.)
Example 4: Sofia experiences a loss of employment. Her 60-day election period would have expired on September 1, 2020, during the Outbreak Period. Under the Outbreak Period relief, her entire 60-day election period is suspended. Because the Outbreak Period has not yet ended as of April 1, 2021, Sofia would be required to submit her election no later than September 1, 2021, which is the earlier of
(A) one year from the original due date for the election, or (B) the end of the Outbreak Period plus the 60 days of her original 60-day compliance period. If the Outbreak Period ended May 31, 2021, Sofia’s 60-day election deadline would be July 30, 2021 (60 days after the end of the Outbreak Period).
COBRA Events after February 28, 2021, until the Outbreak Period Ends (Presently unknown)
Example 5: Shonda experiences a loss or employment. Her 60-day COBRA election period would normally expire on August 31, 2021. If the Outbreak Period has not ended, Shonda’s entire 60-day deadline is suspended under the Outbreak Period relief, and Shonda would not be required to submit her election until August 31, 2022, which is the earlier of (A) one year from the original due date for the election, or (B) the end of the Outbreak Period plus the 60 days left in her original 60-day compliance period. If the Outbreak Period ends July 31, 2021, Shonda’s 60-day election deadline would resume and expire on September 29, 2021 (60 days after the end of the Outbreak Period, which would be earlier than August 31, 2022).
Example 6: Lee elects COBRA after losing coverage due to a reduction of hours and commences coverage effective May 1, 2021. He obtains a Social Security determination of disability on May 31, 2021 and would normally be required to notify the Plan Administrator of that determination within 60 days (by July 30, 2021) so he could extend his COBRA continuation to 29 months. If the Outbreak Period has not ended, Lee’s 60-day deadline is suspended under the Outbreak Period relief, and he would not be required to submit his disability notice until July 30, 2022, which is the earlier of (A) one year from the original due date for the notice, or (B) the end of the Outbreak Period plus the 60 days left in his original 60-day notification period. If the Outbreak Period ends July 31, 2021, Lee’s 60-day election deadline would resume on that date and expire on September 29, 2021 (60 days after the end of the Outbreak Period, which would be earlier than July 30, 2022).
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