The federal government has recognized that employers, employees, former employees, and dependents may have difficulty meeting standard timeframes with respect to their group health plans and COBRA during the COVID-19 National Emergency.  On April 29, 2020, the Departments of Labor, HHS, and Treasury jointly issued immediate relief by temporarily extending the following statutory time frames:

  • Plan administrators' deadline to furnish COBRA election notices to Qualified Beneficiaries. 
  • Plan participants' deadline to notify a health plan of a HIPAA special enrollment event, a disability, or a Qualifying Event.
  • Plan participants' deadline to submit a claim for benefits (e.g. FSA and HRA grace period and run-out period extensions) and file an appeal for a denied benefit claim.
  • Qualified beneficiaries' deadline to elect COBRA continuation benefits.
  • Qualified beneficiaries' deadline to make timely payments for COBRA continuation benefits.

The rules extend the above timeframes by disregarding the statutory deadlines during the “Outbreak Period.”  The Outbreak Period began on March 1st and will end 60 days after the National Emergency end date (or a later date announced in subsequent guidance).  The National Emergency end date has not yet been announced, however, the Departments have included several examples along with the rules which use April 30th as a tentative National Emergency end date.  Also, the federal agencies may issue additional guidance if the National Emergency end date is different for parts of the country.  A full copy of the relief notice is available here.

Periods.

Essentially the federal government is pausing the applicable statutory deadline during the Outbreak Period and it will resume after the Outbreak Period ends.

  • COBRA Event Notification Period: The statutory 44-day period to furnish a COBRA Election Notice is disregarded during the Outbreak Period.  Plan administrator’s deadline to furnish a COBRA Election Notice to a Qualified Beneficiary ends up to 44 days after the end of the Outbreak Period; however, plan administrators should make a strong effort to furnish notices as soon as administratively possible.
  • Claim Submission Period: The Plan’s claim submission Grace Period and/or Runout Period is disregarded during the Outbreak Period.  A Plan’s applicable Grace Period and/or Runout Period will continue for the applicable remaining time frame after the Outbreak Period ends.
  • Election Period: The statutory 60-day COBRA election period is disregarded during the Outbreak Period.  A QB’s COBRA Election Period ends up to 60 days after the end of the Outbreak Period.
  • Initial Payment Grace Period: The statutory 45-day Initial Payment Grace Period is disregarded during the Outbreak Period. A QB’s Initial Premium Payment is due up to 45 days after the end of the Outbreak Period.
  • Subsequent Payment Grace Period: The statutory 30-day Initial Payment Grace Period is disregarded during the Outbreak Period.  A QB’s subsequent premium payment is due up to 30 days after the end of the Outbreak Period.
  • HIPAA Special Enrollment Period: The statutory limit to request a mid-year election change due to a HIPAA special enrollment event is disregarded during the Outbreak Period.  A plan participant’s election change is due up to 30 days (or 60 days for CHIP enrollment changes) after the Outbreak Period.
  • Other Periods:  The statutory 60-day limit to report qualifying events or a disability determination are also disregarded during the Outbreak Period.  A participant’s notification to the plan is due up to 60 days after the end of the Outbreak Period.

Examples & results.

The following examples use April 30, 2020, as the National Emergency end date; however, this date was used simply to make the example clear and understandable.

Please be sure to check the emergency status of your state or region.

The rules extend the 60-day COBRA election period by disregarding the Outbreak Period.

Example:

  • Employee’s hours are reduced causing the employee to lose active coverage under the health plan, which is a COBRA qualifying event.
  • Employee receives the COBRA election notice on April 1, 2020.

Result:

  • The standard 60-day COBRA election period is extended by disregarding the Outbreak Period.
  • Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
  • The employee would have until 60 days after the end of the Outbreak Period (until August 28, 2020) to elect COBRA.

The rules extend the 45-day initial premium payment and 30-day grace period for subsequent premium payment timeframes by disregarding the Outbreak Period.

Example:

  • Employee is a COBRA qualified beneficiary who fails to make timely COBRA premium payments by the end of the 30-day grace period for March, April, May, and June.

Result:

  • The standard 30-day COBRA premium payment grace period is extended by disregarding the Outbreak Period.
  • Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
  • The employee would have until 30 days after the end of the Outbreak Period (until July 29, 2020) to make the COBRA premium payment for the months of March, April, May, and June.
  • The employee is eligible to receive coverage under the plan during this interim period, even though some or all premium payments may not be received until July 29, 2020.
  • If the employee makes a premium payment for only two months of coverage by July 29, 2020, those premiums would apply to the first two months that remained unpaid (March and April), and there would be no COBRA coverage for any month after April 2020.

The rules extend the 60-day employee COBRA notification timeframes by disregarding the Outbreak Period.

Example:

  • Employee and spouse are covered under the employer-sponsored group health plan.
  • Employee and spouse finalize their divorce effective April 1, 2020, causing the spouse to lose eligibility for coverage.

Result:

  • The 60-day period for the employee/spouse to notify the plan of the divorce to preserve the former spouse’s COBRA rights is extended by disregarding the Outbreak Period.
  • Assume the National Emergency ends April 30, 2020, and therefore the Outbreak Period ends June 29, 2020.
  • The employee/spouse would have until 60 days after the end of the Outbreak Period (until August 28, 2020) to notify the plan of the divorce qualifying event and preserve COBRA rights for the former spouse.

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Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.