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Last week the Department of Health and Human Services, DOL and the IRS extended deadlines for multiple items related to health plan administration.  We don’t expect a huge influx of issues from the changes.  However, you should be aware so you don’t inadvertently misinform your employees.    

There were changes made regarding COBRA premium payments and election timeframes but since we have addressed those in a previous post, we won’t address it here.  COBRA administration is outsourced and those impacted are no longer employees so you can direct their questions to your COBRA administrator or to our office.  We’ll also skip the changes made to claims and appeals as that won’t apply to everyone.  That leaves the changes to your benefit program. 

As you are aware, most of the carriers have reduced or even eliminated the minimum number of hours a previously full-time employee must work to be covered by your plan.  Meaning, we can offer coverage to furloughed employees or those that have otherwise reduced hours to below the full-time requirements. 

In addition, the agencies, have decided to disregard the Outbreak Period (the time period between March 1st and at least 60 days after the announced end of the COVID 19 National Emergency) when establishing a deadline to request enrollment in coverage for certain qualifying events.  Meaning, the agencies, added a “pause” to the time frame required for employees to notify you about special enrollment periods, such as marriage or birth of a child.  We are not able to determine the exact end date of the Outbreak Period yet as that is based on an end to the National Emergency (and that had yet to be determined). 

For our examples, we’ll assume the COVID 19 National Emergency ends for the country on June 30th.  This would make the Outbreak Period March 1st to August 29th (60 days following June 30). 

Example 1 – Sally has a baby on March 3rd.  Normally, she would have 30 days to notify us that she would like to add the baby.  However, you are being instructed to disregard the Outbreak Period, therefore she has until September 28th (30 days from the end of the Outbreak Period) to let us know her desire to add her child.

Example 2 – Tom gets married June 1st.  He will have until September 28th to let us know if he intends to enroll his spouse. 

Under these examples, the dependents would be enrolled back to their original eligibility date and the employee would owe those back premiums.  I don’t expect this to become a big issue, however, depending on the employees circumstances it could.  The drawback to employers, other than the inconvenience, is this could have an impact on the group claims.  Normally Tom and Sally would only have 30 days to enroll their dependents.  With the extensions, employees have information about any issues or medical expenditures that have already happened along the way.  Carriers will be responsible to back up, enroll the dependent, and pay any claims incurred. 

Please let us know of any questions you have. 

DOL and IRS Announce Emergency COVID-19 COBRA Rules

May 04 - Posted at 10:49 AM Tagged: , , , , , ,

On April 29, 2020, the Department of Labor (DOL) and the Internal Revenue Service (IRS) announced in a Notice a “pause” in the timelines that affect many COBRA and HIPAA Special Enrollment Period timelines during the National Emergency due to the COVID-19 pandemic.

The National Emergency declaration for COVID-19 was issued on March 13, 2020, and as of the date of this writing, is still in effect. However, for purposes of COBRA in the eyes of the DOL, the “pause” date is set to begin on March 1, 2020. According to the Notice, the period from March 1 through 60 days after the date the National Emergency is declared ended is known as the “Outbreak Period.”

COBRA Timeline Changes During National Emergency

Normally, group health plan Qualified Beneficiaries (QBs) have 60 days from the date of a COBRA qualifying event to elect COBRA coverage, or in the case of a second COBRA qualifying event, to make a new COBRA election. Once a COBRA election is made, the first payment (going back to the date of the COBRA qualifying event) is due no more than 45 days later. After that, plan sponsors must allow at least a 30 day grace period for late COBRA payments.

According to the Notice, all of these timelines are affected. The 60-day election “clock” is paused beginning March 1, 2020 or later until the the end of the Outbreak Period. Similarly, the 45-day first payment “clock” is also paused during the Outbreak Period, as is the 30-day grace period for making COBRA payments.

Example

ABC Company’s group health plan is subject to COBRA continuation coverage. Jane Jetson and her family are covered under ABC’s group health plan. On February 1, 2020 Jane terminates employment at ABC, and on February 5th, Jane receives her COBRA election notice informing her she has 60 days from February 1st to make an election. Normally, that election period would end on April 1, 2020, 60 days from February 1st.

However, with the new DOL/IRS Notice, the “pause” button on the 60 day election period was hit on March 1st, the beginning of the Outbreak Period, so the 60 day clock stops at 29 days and doesn’t resume until the end of the Outbreak Period.  For sake of this example, let’s assume the National Emergency declaration is lifted on May 31, 2020. On July 30, 2020, 60 days after May 31st and thus the end of the Outbreak Period, the “pause” button is lifted and the COBRA election clock restarts for another 31 days to complete the 60 day COBRA election period, which now would end on August 30, 2020.

Continuing with the example and assumptions, if Jane did make her COBRA election to continue coverage on August 30th (the last day to do so), the 45 day clock to make the first payments back to February 1st would begin, and she would have to make all seven months’ payments by October 14, 2020. Of course, by that date she’d also owe payments for September and October as well, although she’d be in the middle of the grace period for October.

HIPAA Special Enrollment Period

Similarly, the 30 day HIPAA Special Enrollment Period (SEP) for qualified changes of status that impacts group health plan enrollment changes is also “paused” until after the end of the Outbreak Period.

Example

Homer Simpson also works for ABC Company, and has elected not to participate in ABC’s group health plan since he has coverage through his spouse Marge’s employer’s group health plan at XYZ Company. On March 15, 2020, Homer and Marge have a baby named Bart, and decide that Homer would like to cover his entire family under ABC’s plan. In normal times, Homer would have 30 days from the date of Bart’s birth to enroll in ABC’s group health plan utilizing the HIPAA SEP.

However, under the DOL/IRS Notice, that 30-day clock is on “pause” until the end of the Outbreak Period. Using the same assumption in the example above, that clock would start on July 30th, and Homer would have until August 30th to enroll his entire family.

Action Items for Plan Sponsors

Plan sponsors will need to pay close attention to this Notice and make proper adjustments in their established COBRA and HIPAA procedures to accommodate it. 

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