On April 28, 2020, the Departments of Labor and Treasury, the ESBA, and the IRS (the Agencies) issued final rules extending certain timeframes under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code) for group health plans, disability and other welfare plans, pension plans, and participants and beneficiaries of these plans during the COVID-19 National Emergency.The Agencies explained the need for the new final rules:
- Because participants and beneficiaries covered by these plans may encounter problems exercising their health coverage portability and continuation coverage rights, or in filing or perfecting their benefit claims under the National Emergency;
- The Agencies want to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established timeframes; and
- The Agencies recognize affected group health plans may have difficulty complying with certain notice obligations.
The following is a brief background of the current law and the need for the changes made by these final rules:
Special Enrollment Timeframes
The Health Insurance Portability and Accountability Act (HIPAA) requires a special enrollment period in certain circumstances, including when an employee or dependent loses eligibility for any group health plan or other health insurance coverage in which the employee or the employee’s dependents were previously enrolled (including coverage under Medicaid and the Children’s Health Insurance Program). The circumstances also include when a person becomes a dependent of an eligible employee by birth, marriage, adoption, or placement for adoption.
Group health plans must allow such individuals to enroll if they are otherwise eligible and if enrollment is requested within 30 days of the occurrence of the event (or within 60 days in the case of the special enrollment rights under the Children’s Health Insurance Program).
COBRA’s continuation coverage provisions provide a qualified beneficiary a period of at least 60 days to choose COBRA continuation coverage under a group health plan. Plans are required to allow payment of premiums in monthly installments, and plans cannot require payment of premiums before 45 days after the day of the initial COBRA election.
COBRA continuation coverage may be terminated for failure to pay timely premiums. Under COBRA rules, a premium is considered paid timely if it is made no later than 30 days after the first day of the period for which payment is being made.
COBRA’s notice requirements set out time periods for the following:
- Employers to notify the plan of certain qualifying events,
- Individuals to notify the plan of certain qualifying events or a determination of disability, and
- Plans to notify qualified beneficiaries of their rights to elect COBRA continuation coverage.
Benefit Plan Claims Procedure Timeframes
ERISA-covered employee benefit plans and non-grandfathered group health plans, along with health insurance issuers offering non-grandfathered group or individual health insurance coverage are required to establish and maintain a procedure governing the filing and initial determinations of benefit claims, and to provide claimants with a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary.
Plans may not have provisions that unduly inhibit or hamper the initiation or processing of claims for benefits. Further, group health plans and disability plans must provide claimants with at least 180 days following receipt of an adverse benefit determination to appeal (60 days in the case of pension plans and other welfare benefit plans).
Health Plan External Review Process Timeframes
ERISA sets out standards for external review that apply to non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage (either a state external review process or a federal external review process).
Standards for external review processes and timeframes for submitting claims to the independent reviewer for group health plans or health insurance issuers vary depending on whether a plan uses a state or federal external review process.
For plans or issuers that use the federal external review process, the process must allow at least four months after the receipt of a notice of an adverse benefit determination or final internal adverse benefit determination for a request for an external review to be filed.
The federal external review process also provides for a preliminary review of a request for external review. If such request is not complete, the federal external review process must provide for a notification that describes the information or materials needed to make the request complete, and the plan or issuer must allow a claimant to perfect the request for external review within the four-month filing period or within the 48-hours following the receipt of the notification, whichever is later.
(B) Relief Under the Agencies’ Final Rules
Relief for Plan Participants, Beneficiaries, Qualified Beneficiaries, and Claimants
All group health plans, disability, and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA section 518 or the Code section 7508A must disregard the period from March 1, 2020 until 60 days after the announced end of the National Emergency or other date announced by the Agencies in a future notice (the “Outbreak Period”) when determining the following periods and dates:
- The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA section 701(f) and Code section 9801(f),
- The 60-day election period for COBRA continuation coverage under ERISA section 605 and Code section 4980B(f)(5), the date for making COBRA premium payments pursuant to ERISA section 602(2)(C) and (3) and Code section 4980B(f)(2)(B)(iii) and (C),
- The date for individuals to notify the plan of a qualifying event or determination of disability under ERISA section 606(a)(3) and Code section 4980B(f)(6)(C),
- The date within which individuals may file a benefit claim under the plan’s claims procedure pursuant to 29 CFR 2560.503–1,
- The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure pursuant to 29 CFR 2560.503–1(h),
- 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 pursuant to 29 CFR 2590.715–2719(d)(2)(i) and 26 CFR 54.9815–2719(d)(2)(i), and
- 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 pursuant to 29 CFR 2590.715– 2719(d)(2)(ii) and 26 CFR 54.9815–2719(d)(2)(ii).
Relief for Group Health Plans
With respect to group health plans and their sponsors and administrators, the Outbreak Period must be disregarded when determining the date for providing a COBRA election notice under ERISA section 606(c) and Code section 4980B(f)(6)(D).
The attorneys of Woods Rogers PLC continue to monitor COVID-19 response developments from the federal, state, and local governments. Please contact a member of the ERISA and Employee Benefits practice group if you have questions or concerns.