If the President declares a national disaster, language within ERISA and the Internal Revenue Code permits the Secretaries of the Departments of Labor and Treasure to prescribe a period of up to one year that may be “disregarded” when determining due dates for certain actions under a group health plan.
The Secretaries issued such an extension effective March 1, 2020 (Notice 2020-01 or Joint Notice). Among other things, Notice 2020-01 extended the time for individuals who had a qualifying event to make a COBRA election.
The COBRA extension was set to expire on the earlier of
- one year from its effective date; or
- 60 days after the announced end of the COVID-19 National Emergency. The extension provided in the notice expires automatically on February 28, 2021. However, the National Emergency has not ended.
The Joint Notice was unclear on how its expiration would affect individuals who had a COBRA qualifying event while the extension was in effect. It did not explain whether the relief ended for all such individuals on March 1, 2020 or the one-year extension applied on an individual basis.
On February 26, 2021, the EBSA issued its Notice 2021-01 to answer this question. It provides that individuals who were subject to the relief under the Joint Notice will have the applicable periods under the Notice disregarded until the earlier of
- 1 year from the date they were first eligible for relief; or
- 60 days after the announced end of the National Emergency (the Outbreak Period).
Notice 2021-01 gives the following examples:
- If a qualified beneficiary would have been required to make a COBRA election by March 1, 2020, the Joint Notice delays that requirement until February 28, 2021, which is the earlier of 1 year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing).
- Similarly, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the Joint Notice delays that election requirement until the earlier of 1 year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.
Although Notice 2021-01 does not expressly impose any specific notification requirements on plans, it notes that general principles of fiduciary duty, including prudence and acting in the interests of plan participants, may require plan administrators to take steps to ensure that individuals do not inadvertently lose any rights or benefits due to the expiration of the relief provided under Notice 2020-01.
Accordingly, plan administrators are strongly encouraged to:
- take appropriate steps to notify affected individuals of the dates by which they need to act; and
- plans should consider ways to ensure that individuals who are losing coverage under their group health plans are made aware of other coverage options that may be available to them, including the opportunity to obtain coverage through the Health Insurance Marketplace in their state.
Notice 2021-01 explicitly mentions the special enrollment period created under Executive Order 14009 is available to the consumers in the 36 states that use the HealthCare.gov platform starting on February 15 and continuing through May 15 and similar opportunities being offered in 13 that operate their own Marketplace platforms.