Relief for Participants and Plan Sponsors from Certain Time Deadlines
Summary of the Guidance
Recognizing the impact of the COVID-19 Pandemic, the Internal Revenue Service and the Department of Labor have released guidance that extends various requirements and deadlines including but not limited to COBRA Continuation Coverage. The regulation essentially pauses the clock on many COBRA 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). The extension includes the time-frame to make a COBRA Election as well as an extension to remit COBRA Payments. In the below subsections, OCA has provided additional details on these extensions and how it may pertain to the COBRA Election time-frame and/or COBRA Payments.
COBRA Election Time frame
Under COBRA continuation law, once a beneficiary has a qualified event (loss of job, reduction in hours, death of covered employee, etc.), they have 60 days to choose whether or not to elect COBRA coverage. Under the new guidance, the calculation of the 60 day election time-frame is put on pause starting March 1, 2020 until the end of the “outbreak period”, which again is yet to be determined.
Example 1) If the qualifying event occurred on February 15, 2020 (prior to the National Emergency), then the last day to elect COBRA is August 13, 2020. The qualified beneficiary was 15 days into their election time-frame on March 1, 2020 and therefore will have an additional 45 days from the end of the “outbreak period” to make their COBRA election.
Example 2) If the qualifying event occurred on April 1st, 2020 (during the National Emergency), then the last day to elect COBRA is 60 days after the end of the “outbreak period.
This new rule also extends the payment deadlines for COBRA premiums. All COBRA premium payments that would have been otherwise due during the “outbreak period” are instead due 30 days after the end of the Outbreak Period. If a qualified beneficiary is on COBRA as of March 1 and the Outbreak Period ends June 29, he/she would have until July 29 (30 days later) to pay premiums for March, April, May, and June. In this example, the qualified beneficiary IS ELIGIBLE to receive coverage under the plan during the interim period. For purposes of providing these examples, the sample dates are based under the assumption that the “outbreak period” ends on June 29th (60 days from the end of the National Emergency).
OCA Updates COBRA Notices
While not required by law, OCA has already proactively updated many of our COBRA Notices to include information regarding these extensions. Effective immediately, the following COBRA notices will include information regarding the COBRA extension deadlines; COBRA Election Notice, Failure to Elect Notice, and Failure to Make Payment Notice. Additionally, OCA has posted the Federal Governments guidance on our COBRA portal for brokers, employers, and qualified beneficiaries to access. Below is a snapshot of the additional notice. For additional information on OCA’s COBRA communication workflow to existing/new qualified beneficiaries, please log into OCA’s COBRA portal.
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