A Final Rule issued by the Department of Labor, Internal Revenue Service (IRS) and Treasury Department (Joint Notice) on May 4, extended certain timeframes affecting a participant’s right to healthcare coverage, portability, and continuation of group health plan coverage under COBRA.
The Joint Notice refers to “The Outbreak Period”. This period is from March 1, 2020 until 60 days after the announced end of the national emergency. Note that the end of the emergency has not been announced.
The Final Rule indicates that for a variety of provisions, the days you would use to calculate time periods for compliance will be disregarded if those days fall within the “Outbreak Period,” and therefore are extended.
The affected provisions include:
The HIPAA portability rules require group health plans to provide mid-year enrollment opportunities to employees and their dependents in certain circumstances. A qualifying individual has to exercise their right within 30 days or 60 days of the qualifying event.
Under the COBRA rules, an employee and/or their dependent who has a COBRA qualifying event and experiences a loss of group health plan coverage generally has 60 days from the date group health plan coverage to elect COBRA continuation coverage.
Also, a COBRA-qualified beneficiary is required to notify the group health plan within 60 days of certain COBRA qualifying events and certain disability related issues.
Regarding premiums, once individuals have elected COBRA coverage, they have 45 days to make their initial COBRA premium payment and subsequent payments must be made within 30 days after the due date for that coverage month.
Finally, employers have 14 days to send the COBRA Election Notice that goes to qualified beneficiaries.
Retroactively back to March 1, 2020 and through the end of the “Outbreak Period,” there are no deadlines to file claims or appeals. This includes health FSA and HRA reimbursement requests, but not Dependent Care FSAs (DCAPs). However, see our article on DCAPs that use a grace period. Therefore, if a Health FSA or HRA had a runout period that ended on April 30, 2020, as an example, the plan cannot require participants forfeit any remaining balance during the “Outbreak Period”. The standard use-it or lose-it rule is suspended for now. The rule applies all participants and beneficiaries through the participant’s termination date, if applicable.
In general, a plan’s claim procedures provide a timeframe to appeal a benefit claim denial or request an external review (or perfect one). Under the Joint Notice, the date within which claimants may file an appeal must be disregarding the “Outbreak Period.”
Finally, a plan administrator's time to review claims and appeals have not been suspended. Plans will need to adhere to their current procedures for reviewing claims and appeals in a timely manner.
Please contact your Nyhart consultant on how these new rules may affect your plan. These changes are not optional. At this time, it is not clear if plan amendments are needed to effectuate these updates.