DOL Clarifies COBRA Continuation and Other Time Periods During the COVID Outbreak with Updated Guidance

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Last year, the U.S. Department of Labor (DOL) issued a new rule which extended the period of time that a participant had to enroll in coverage under a health plan, elect and pay for COBRA continuation coverage, submit claims for coverage and dispute denials of claims for benefits.

The DOL has now issued updated guidance (ESBA Disaster Relief Notice 2021-01) on the duration of the COVID related relief.  Under the new notice, the deadlines that are subject to the relief under the prior guidance are extended until the earlier of (a) one year, or (b) the end of the outbreak period. On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume. In no case will a disregarded period exceed 1 year.

The guidance provides the following examples of how the extension applies:

If a qualified beneficiary, for example, would have been required to make a COBRA election by March 1, 2020, the prior 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 prior 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. Likewise, if a plan would have been required to furnish a notice or disclosure by March 1, 2020, the relief under the Notices would end with respect to that notice or disclosure on February 28, 2021. The responsible plan fiduciary would be required to ensure that the notice or disclosure was furnished on or before March 1, 2021. In all of these examples, the delay for actions required or permitted that is provided by the Notices does not exceed 1 year.

The DOL further described in the notice that plan administrators “should consider affirmatively sending a notice regarding the end of the relief period” to those who the plan administrators know or should know will be affected by the ending of the extensions. The DOL stated that prior disclosures, such as COBRA election notices and claims procedure notices, may need to be reissued or amended if they failed to provide accurate information regarding the deadlines to take action.