The Impact of Claim Submission Extensions on HRAs and FSAs
Last week the Internal Revenue Service and the Department of Labor released guidance that extends the period of time that a participant has in enrolling in coverage under a health plan, paying for COBRA continuation coverage, submitting claims for coverage and disputing denials of claims for benefits. The regulation essentially stops the clock on many of these deadlines starting March 1, 2020, and lasting until 60 days after the Administration ends the COVID-19 national emergency, (aka the “Outbreak Period” which is still to be determined).
Today, we are focusing on the “claim submission extension” and the impact it has on employer- sponsored HRAs and Health FSAs. When trying to understand the latest IRS/DOL guidance as it relates to HRAs and/or Health FSA claim submissions, would be to describe it as every day is groundhog day. It’s February 29, 2020, until the “Outbreak Period” has ended.
Here’s an example:
- Assume “Outbreak Period” ends June 29th, 2020
- Employer sponsored HRA and/or FSA plan(s) ends on 12/31/2019
- Both the HRA and FSA have a 90-day run-out period (March 31st last day to submit claims for 2019)
- New Guidelines: The HRA and FSA run-out period will continue until the “outbreak period” is over PLUS the remaining days that were left during the plan run-out period as of February 29, 2020 (date run out was paused)
- Answer: July 29th is last day to submit 2019 claims. The 31 days of the Plan’s run out period for 2019 that occurred during the Outbreak period is added to the end of the Outbreak Period
How is OCA handling this? Until further guidance is provided, OCA will begin allowing employees to submit eligible 2019 run-out claims up until the “Outbreak Period” is over + the additional days that were remaining of the original run-out period on February 29, 2020. Employers should be mindful that this may impact their 2019 benefit utilization.
What if the employer already extended the 2019 HRA and/or Health FSA run-out period? OCA will be reverting back to the employers original run-out date (most likely 3/31/2020) and will follow the guidance issued by the IRS/DOL until further notice. If you have any further questions, please contact OCA directly.
OCA is here to help in any way possible and we will continue to communicate new information and best practices as we learn more. In the meantime, if you have any questions or concerns, please call us at 855-622-0777.