On May 4, the Department of Labor and IRS jointly published a Rule entitled “Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak.” The final rule extends most COBRA deadlines to beyond the “Outbreak Period,” which it defines as March 1, 2020, to 60 days after the end of the declared COVID-10 national emergency, or another date if provided by the agencies in future guidance (i.e., if the emergency declaration expires on June 29, 2020, the Outbreak Period will end on August 28, 2020).

The rule extends various COBRA deadlines as follows:

• The COBRA election period. Under COBRA, employees and dependents who lose active coverage as a result of a qualifying event, such as termination of employment or reduction of hours, normally have 60 days to elect continuation coverage after receiving a COBRA election notice. Under the rule, the 60-day timeframe doesn’t start to run until the end of the Outbreak Period.
• The COBRA premium payment period. COBRA enrollees normally have 45 days from their COBRA election to make the first premium payment, and subsequent monthly payments must be made within a 30-day grace period that starts at the beginning of each coverage month. Under the new rule, the initial premium payment and grace period don’t start to run until the end of the Outbreak Period.
• The date for individuals to notify the plan of a qualifying event or determination of disability. Normally an individual has 60 days to inform a plan administrator of a qualifying event (i.e., a divorce or a child reaching the age of 26). Under the new rule, the 60 day period does not start to run until the end of the Outbreak Period.

Deadlines for individuals to file a benefit claim, to file an appeal of adverse benefit determination under the plan’s claims procedure, and to file a request for an external review after receipt of an adverse benefit determination were similarly extended.

Note, however, that no extension was granted for the 14-day deadline for plan administrators to furnish COBRA election notices after a qualifying event has occurred.

Under the new rule, employers must permit an employee or beneficiary to elect COBRA coverage even if more than 60 days has passed since the employee or beneficiary lost coverage under the employer’s health plan. In addition, an employer cannot terminate an employee’s COBRA coverage for failure to pay premiums during the “Outbreak Period,” which may result in the employer paying for the employee’s coverage.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.