On April 28, 2020, the Department of Labor (DOL) issued Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2020-01, which extended COBRA grace periods to all plan participants. Just recently, the DOL and the Internal Revenue Service issued an interpretation of prior guidance that extended certain deadlines for employee benefit plans, participants, and beneficiaries due to COVID-19.
Is the Outbreak Period Ending Soon?
In the spring of 2020, regulations were issued suspending time frames for certain employee benefit actions for the duration of what is called the outbreak period. Examples of employee benefit actions that are impacted include: COBRA election and premium payment period, HIPAA special enrollment, claims period, and external review periods among others.
Note: The outbreak period is not directly imposed upon public sector entities such as state and local governments, although Health and Human Services indicated that they encourage state and local governments to follow the outbreak rules.
The outbreak period is the period that began March 1, 2020, and continues until 60 days following the end of the national emergency. In March of 2020, then President Trump declared a national emergency pursuant to the National Emergency Act and pursuant to the Stafford Act. As of this date, no end to this national emergency has been stated. In fact, on February 24, 2021, President Biden issued a letter to Congress affirming that the national emergency continues. Pursuant to ERISA Section 518 and IRC Section 7508, a national emergency can last only one year. Since this national emergency commenced on March 1, 2020, this would mean it would end on February 28, 2021. Like most everything related to 2020 and the coronavirus situation, the duration of this national emergency is unprecedented. This is the first time a national emergency has come close to reaching the one-year limit. This has created a bit of uncertainty until February 26, 2021, when the DOL issued Disaster Relief Notice 2021-01 affirming that the outbreak period permitted by ERISA section 518 and Internal Revenue Code section 7508 is a maximum of one year measured from the occurrence of the need.
The outbreak period that began on March 1, 2020, ended on February 28, 2021, with no additional 60-day extension for those whose occurrences happen on or around that date. What this means is that the election period, premium payment, or grace periods that were suspended during the outbreak period begin to run on March 1, 2021. Notably, the one-year measurement period, according to this notice, is unique to each individual. While this is favorable to individuals, it will create significant complications for plan administrators because each impacted individual will have his/her own measurement period equaling the first to occur of the emergency’s end plus 60-days or a one-year period.
The notice affirms that the Treasury and the Internal Revenue Service agree with the Department of Labor’s interpretation and the notice also recognizes that individuals may continue to experience difficulties as a result of the ongoing public emergency and encourage plans and plan sponsors to be accommodating. Plans can always be designed to be more generous than the minimum requirements of the law as long as all documents including by way of example, insurance contracts and stop-loss contracts, reflect this.
Plan sponsors and their plans should provide explanatory notices to impacted individuals, particularly those whose relevant event occurred on or around March 1, 2020, advising them that relevant election notice or premium payment periods will now begin to run. It might also be prudent to provide a notice to all individuals impacted by the outbreak period informing them that the outbreak period will end on the first to occur of 60-days following the end of the declared emergency, or one year from the date the individual’s relevant event occurred.
Distinguishing Public Health Emergency from National Emergency
The Secretary of Health and Human Services declared a public health emergency in January of 2020. (This public health emergency can extend for 90 days and is renewable.) Ever since then, the 90-day public health emergency has been renewed, most recently in January of 2021, extending through April 20, 2021. The public health emergency is distinct from and independent of the national emergency described above.
Note: the public health emergency dictates that medically indicated coronavirus testing delivered both in- and out-of-network must be covered at no cost to the participant for the duration of the public health emergency. Guidance issued on February 26, 2021, clarifies that this includes asymptomatic individuals having no known contact with an affected individual.
COVID-19 Vaccine
The CARES Act provides that the coronavirus vaccine must be covered as an Affordable Care Act (ACA) preventive service, meaning it must be covered in-network. However, for the duration of the public health emergency, it must be covered as a preventive service both in and out-of-network.
Guidance issued on February 26, 2021, clarifies that this includes asymptomatic individuals having no known contact with an affected individual. The CARES Act provides that the coronavirus vaccine must be covered as an Affordable Care Act (ACA) preventive service, meaning it must be covered in-network. However, for the duration of the public health emergency, it must be covered as a preventive service both in and out-of-network.
As a reminder, at this point, two coronavirus vaccines, the Pfizer vaccine, and the Moderna vaccine have been granted emergency use authorization and must be covered as an ACA preventive service. On February 27, 2021, the FDA approved for emergency use of the Johnson & Johnson COVID-19 vaccine. A preventive designation of the Johnson & Johnson vaccine will likely be issued in the days to come.