Department of Labor (DOL) and Internal Revenue Service (IRS) Issues Final Ruling on Deadline Extensions

On April 29, 2020, the Department of Labor (DOL) and Internal Revenue Service (IRS) (the “Agencies”) issued guidance for group health plan sponsors related to deadline extensions for group health plans, including extension coverage through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), health care flexible spending accounts (HCFSA) and health reimbursement arrangements (HRA). Deadline extensions to the established timelines are provided through the duration of the COVID-19 State of Emergency declaration, plus a 60-day “Outbreak Period” following the date the COVID-19 State of Emergency ends. Since an end date has not yet been specified for the current State of Emergency declaration, at this time a specific end to the “Outbreak Period” cannot be determined. ERISA Section 518, as amended by section 3607 of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), indicates the disregarded period may not exceed one year.

Extensions apply retroactively to actions required beginning March 1, 2020. Timeline extensions include:

COBRA

• COBRA qualified beneficiary coverage election periods;
• COBRA payment deadlines;
• COBRA qualifying event notice requirements for the employer;
• Employee notice requirement of qualifying events to the employer; and
• COBRA coverage period extension requests due to disability.

Health Care FSA and HRA

• Claims filing deadlines that fell on or after March 1, 2020;
• Employee notice requirement of qualifying status changes to the employer; and
• Employee response to claims appeals process.

At this time, the guidance does not address existing salary reduction agreements that may be in place or whether employers may be permitted to allow changes to existing elections. The guidance also does not specifically address the Dependent Care FSA. The Agencies have also provided a FAQ document that employers should review along with the guidance that provides various processing scenarios and examples to guide employers. We will continue to evaluate guidance as it is released by government agencies and will amend processing periods for applicable plans to ensure compliance for our valued clients and broker partners.