COVID-19 Benefit Services

FOCUS Newsletter

May 1, 2020 – SPECIAL RELEASE

DEADLINE EXTENSIONS

On April 28, the U.S. Department of Labor, the Department of Treasury and the Internal Revenue Service jointly issued a final rule extending numerous timeframes applicable to group health plans (including health FSAs, HRAs, and COBRA). The purpose of the rule is to assist affected group health participants that may be having difficulty in meeting deadlines for enrollment, payment of premiums, coverage portability, and claims filing. Additionally, some group health plans might be having problems providing timely notices.

What types of timeframes or deadlines are extended by this rule?

• Claim filing deadlines;
• HIPAA special enrollment timeframes;
• Appeal deadlines;
• COBRA election deadlines;
• COBRA qualifying event and disability notice deadlines from participants; and
• COBRA premium payments.

When is the rule effective?  And, what is the length of the extension? The final rule is effective immediately upon publication. This would mean that any deadline that ended on or after March 1, 2020 (the start date of the National Emergency due to COVID-19 as declared by the President) would be extended through the full period of the National Emergency plus an additional 60 days. At this time, we do not know the ending date of the National Emergency.

What operational changes will ASI COBRA and ASIFlex be making to assist with these extensions?

• ASI COBRA is working with its software vendor to determine system updates and will be providing notices of the extension immediately.
• ASI COBRA will be mailing out reinstatement notices to qualified beneficiaries who had coverage terminated due to non-payment during the affected periods.
• ASIFlex is currently making changes to its proprietary system in order to extend the claim filing deadlines on an ongoing basis until the National Emergency period ends, and ASIFlex will include information regarding the extensions in its statements and notices.
• ASIFlex is currently reviewing all denied claims due to late filing. All such claims will be reprocessed and paid without requiring any additional participant involvement.
• ASIFlex is researching all appeals with deadlines falling into this timeframe and will be providing updated notice regarding deadline extensions.

Examples for the above timeframes/deadlines (For these examples, we are assuming that the National Emergency ends on May 15, 2020. A period of 60 days following that end date would be July 14, 2020.):

Claim filing example:

• For a 2019 calendar year plan with a claims filing deadline of March 15, 2020, the claims filing deadline would be extended to July 14, 2020.

HIPAA special enrollment example:

• An employee was married on February 15, 2020. The plan in question provides that the employee must submit a change in status request to newly enroll in the plan within 30 days (March 16, 2020). Because March 16, 2020 occurs during the National Emergency period, the employee would be permitted to submit an enrollment request to the plan on or before July 14, 2020. Please note:  Enrollments cannot be retroactive unless the enrollment is a birth, adoption, or placement of adoption. So in this instance, if the employee waited until July 14, 2020 to submit the enrollment, the coverage would not become effective until either the first payroll period or the first of the month (depending on your specific plan document) following the receipt and approval of the request.

Appeal example:

• A participant submitted a claim which was denied on February 15, 2020. The plan in question requires that any appeals must be submitted within 60 days of the denial (April 15, 2020). The appeal timeframe is appended to the end of the National Emergency plus 60 day period. There are 15 days between February 15, 2020 and March 1, 2020. This entitles the participant to 45 days (the remainder of the appeal period) following the end of the National Emergency plus the additional 60 day period (July 14, 2020 in our example). Thus, the participant is able to file an appeal until August 28, 2020.

COBRA election example: 

• An employee is terminated on April 20, 2020. Normally, the qualified beneficiary would have 60 days in which to elect coverage. The election period begins after the National Emergency plus 60 day period (July 14, 2020). Thus, the qualified beneficiary has until September 12, 2020 to elect COBRA coverage (the 60 day election period follows the July 14, 2020 end date).

COBRA premium example:

• Monthly premiums are due on the first of the month, and a qualified beneficiary has a 30 day grace period in which to send in the appropriate premium. The qualified beneficiary fails to make a premium payment on March 31, 2020 for March’s coverage. COBRA coverage will not be terminated due to non-payment during the National Emergency plus the following 60 days. The qualified beneficiary will have until August 13, 2020 (the full 30 day grace period following July 14, 2020), in which to pay the premium for March as well as for coverage for the months of April, May, June and July. The qualified beneficiary would need to pay the premium for August no later than August 31, 2020 (the normal 30 day grace period would apply since the National Emergency plus the additional 60 day period expired prior to August 1).

Will our plan document need to be amended for this change? Not necessarily. No plan document amendment would be required as the plan would simply be following the new regulations. However, you may also wish to extend the dependent care FSA claim filing deadlines to coincide with these regulations. In that case, an amendment may be necessary depending upon the language in your plan document. If you wish to adopt this change for your dependent care FSA and your document needs to be amended, ASIFlex can assist you in preparing the amendment.

Does this rule affect the maximum length of time for COBRA coverage? No. There is nothing in the rule regarding extending the coverage period itself except in the case of nonpayment of premiums and allowing participants additional time to provide notice of disability and qualifying events.

Does this rule affect the maximum length of time for Health FSA coverage? No. The rule does not change the period of coverage for group health plans; it only extends the time period for claims submission – not the period of time to incur claims (receive services).

Here are links to the documents mentioned above:

• News Release:  https://www.dol.gov/newsroom/releases/ebsa/ebsa20200428
• Notice on the Final Rule:  https://www.dol.gov/sites/dolgov/files/ebsa/temporary-postings/covid-19-final-rule.pdf
• FAQs:  https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/covid-19.pdf
• EBSA Disaster Relief Notice 2020-01:  https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2020-01