Notice of Ending of Certain COVID-19 COBRA Election Time Frame Extensions - February 26, 2021
The Department of Labor (DOL) released Employee Benefits Security Administration Disaster Relief Notice 2021-01 on February 26, 2021 (the “Updated Outbreak Guidance”).
The Updated Outbreak Guidance clarifies previous guidance as to the ending of certain COVID-19 timeframe extension relief provided under the Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak joint notice issued by the Internal Revenue Service and the DOL on April 28, 2020 (the “Outbreak Relief Notice”).
Background
The original Outbreak Relief Notice, among other things, extended the normal time frames involved in obtaining COBRA continuation coverage.
Usual COBRA Time Frames
- The minimum 60-day election period for electing COBRA continuation coverage
- The 45-day initial COBRA premium deadline
- The 30-day grace period for subsequent monthly COBRA premiums
- The 14-day period, following notice of an event, that plans have to provide qualified beneficiaries with an election notice
- The 60-day period that qualified beneficiaries have to provide notice to the employer of a qualifying event or disability determination
Timeframe Extension and Limit
These time frames were extended by disregarding the period of time from March 1, 2020 until 60 days after the end of the COVID National Emergency (which is still continuing). This period is known as the Outbreak Period.
Even though the Outbreak Period is still ongoing, the Outbreak Period extensions were provided under statutory authority that limits the period of time that can be disregarded to a maximum period of up to one (1) year.
What Does The Updated Outbreak Guidance Change?
The Updated Outbreak Guidance clarifies that the one year limit on COBRA time frame extensions does not run from March 1, 2020 for all eligible individuals but instead must be applied on an individual basis.
According to the Updated Outbreak Guidance, the maximum time frame extension for any eligible individual will run from the earlier of: (i) one (1) year from the date the individual was first eligible for relief, or (ii) the end of the Outbreak Period.
How Does This Impact COBRA Eligible Members?
Relief was available to individuals who had an applicable action, election, or payment that was required on or after March 1, 2020. The timeframe extension for some individuals has now ended because one (1) year has passed since they became eligible for relief.
The timeframe extension is still continuing, however, for others who became eligible for relief later, but will end on the earlier of: (i) the one (1) year anniversary of their original deadline date, or (ii) the day the Outbreak Period ends (if an end is announced).
Examples
- If A’s election period started 2-1-20, her election deadline was tolled as of 3-1-20. Her one-year Tolling Period would end 2-28-21, so her election period would start 3-1-21, and she would have the balance of her 60-day election period.
- If QB B’s election period started 3-1-20, her election deadline was tolled as of 3-1 -20. Her one-year Tolling Period would end 2-28-21, so her 60-day election period would start 3-1-21.
- If QB C’s election period started 6-1-20, her election deadline was tolled right away, as of 6-1-20. Her one-year Outbreak Period would end 5-31-21, so her 60-day Tolling period would start 6-1-21.
- If QB D’s election period starts 4-1-21, her election deadline also will be tolled right away on 4-1-21, as long as we are still in the National Emergency. Her one-year Tolling Period would end 3-31-22, so her 60-day election period would start 4-1-22.
60-Day Election Period
Notwithstanding the foregoing, in line with DOL guidance and in light of the challenges due to the continuing COVID-19 pandemic, to prevent the unintentional loss of benefits:
- if the individual's one-year Tolling Period has already ended, the individual will have 60 days from the date of this notice to exercise their rights to elect COBRA continuation coverage; and
- if individual's one-year Tolling Period has not yet ended, the individual will have 60 days from the end of such Tolling Period to exercise their rights
Further Information Regarding the Updated Outbreak Guidance
The link for the full text of the Updated Outbreak Guidance can be found here.
Further Notice Upcoming Regarding the American Rescue Plan Act of 2021
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (“ARPA”) which includes various COBRA related provisions, including a 100% federal subsidy of COBRA premiums during the period from April 1, 2021 through September 30, 2021. The subsidy applies to group health coverage typically subject to COBRA, except for health flexible spending accounts.
Critical additional guidance regarding the implementation of this subsidy is expected by mid-April. Once this guidance has been issued, we will publish further information regarding the implementation of this subsidy and the options with respect thereto.
Further Questions
For Questions and for More Information: If you have any questions about the information in this summary or your COBRA continuation coverage rights during the COVID–19 pandemic, please contact your COBRA administrator.