In our February 12th blog post, we raised the question of how to interpret the duration of the DOL/Treasury relief tolling certain benefit plan deadlines  due to the COVID-19 pandemic. Without guidance from the agencies, it was unclear whether the relief was set to expire in a few days (on February 28, 2021) due to a one-year tolling limit in ERISA and the Internal Revenue Code, or whether it would continue for a longer period. Now we have our answer.

In EBSA Disaster Relief Notice 2021-01, the DOL explains that the one-year tolling period will be applied on an individual-by-individual basis, meaning that a deadline will be tolled until the earlier of (i) one year from the date the individual was first eligible for the relief, or (ii) the end of the Outbreak Period (i.e., 60 days after the announced end of the National Emergency, which is ongoing).  This means that every plan participant and beneficiary who was subject to a deadline that expired March 1, 2020 or later will have until the one-year anniversary of that deadline to take the required action (i.e., elect or pay for COBRA coverage, exercise a special enrollment right, or file a claim or appeal), unless the Outbreak Period ends sooner. Somewhat unexpectedly, this includes individuals who have a deadline that expires after February 28, 2021.

What to do now? Plans need to consider the types of notices and/or announcements they should make to participants and beneficiaries, and whether those notices can be general in nature or need to be more individualized. In this regard, the DOL suggests that plans should consider affirmatively sending a notice regarding the end of the relief period if it knows or has reason to know that an individual’s relief period is ending. Plans also should review the notices they sent when this began, as the notices likely will need to be updated depending on how they were worded. Interestingly, the DOL Notice goes a step further by suggesting that plans consider ways to ensure that participants and beneficiaries who are losing group health coverage are aware of other options that may be available, such as Marketplace coverage, particularly in light of new special enrollment opportunities in certain states.

While the agencies’ position may be unwelcome news for some who expected the administrative burdens of tolling to end at the end of the one-year period on February 28,, 2021, it is not entirely unexpected. The DOL reiterates that, in light of the ongoing issues caused by the pandemic, plans should be administered in a reasonable manner taking into account the difficulties facing individuals due to the pandemic and the fact that they rely on the plans’ benefits for their well-being. With this guidance in mind, plan administrators should exercise caution and provide appropriate notice before denying an individual a benefit or right based on a failure to take action within the applicable timeframes.

Photo of Paul M. Hamburger Paul M. Hamburger

Paul Hamburger is co-chair of the Employee Benefits & Executive Compensation Group and head of the Washington, DC office. Paul is also a leader of the Practice Center’s health and welfare subgroup and a member of Proskauer’s Health Care Reform Task Force.

Paul…

Paul Hamburger is co-chair of the Employee Benefits & Executive Compensation Group and head of the Washington, DC office. Paul is also a leader of the Practice Center’s health and welfare subgroup and a member of Proskauer’s Health Care Reform Task Force.

Paul provides technical knowledge and advice to employers on all aspects of their employee benefit programs, and advises employee benefit plan trustees and service providers on ERISA and employee benefit plan-related matters. He has extensive experience in negotiating service provider and outsourcing agreements. Paul frequently represents clients before government regulatory agencies, including the Internal Revenue Service, Department of Labor and Pension Benefit Guaranty Corporation.

Paul focuses on all matters affecting employee benefit plans, including:

  • 401(k) plans, ESOPs, and defined benefit plans, including cash balance pension plans
  • Executive compensation plans and agreements
  • Welfare benefit plans, including cafeteria plan, COBRA, and health care reform (PPACA) issues

Recognized by a number of publications for his exceptional work, Paul is described by The Legal 500 United States as “one of the best in his field; he inspires a high level of confidence and is a pleasure to work with.” Chambers USA notes that Paul’s clients refer to him as “a creative, business-oriented and brilliant lawyer who educates and enlightens.”

As a noted thought leader in his field, Paul frequently speaks on employee benefit matters. In addition, he served for several years as an adjunct professor at Georgetown University Law Center teaching the LL.M. tax course on ERISA Health and Welfare Benefit Plans.

An author of numerous articles on employee benefits matters, Paul has produced a number of nationally-circulated loose leaf publications, published by Thompson Information Services: Mandated Health Benefits – The COBRA Guide, The Guide to Assigning & Loaning Benefit Plan Money, and The Pension Plan Fix-It Handbook. Most recently, he was the managing author of the 6th edition of The New Health Care Reform Law – What Employers Need to Know (A Q&A Guide), published by Thompson HR.

Photo of Roberta Chevlowe Roberta Chevlowe

Roberta K. Chevlowe provides advice to employers and boards of trustees of multiemployer benefit plans on a broad range of issues relating to their retirement, health and other employee benefit plans. With nearly three decades of experience practicing in this area, Roberta employs…

Roberta K. Chevlowe provides advice to employers and boards of trustees of multiemployer benefit plans on a broad range of issues relating to their retirement, health and other employee benefit plans. With nearly three decades of experience practicing in this area, Roberta employs a practical, business minded approach to helping her clients comply with the various requirements imposed by ERISA, the Internal Revenue Code, COBRA, the Affordable Care Act and other federal and state laws affecting employee benefit programs. Roberta’s practice also includes advising clients in connection with benefit claim appeals, lawsuits and government audits; drafting plan documents, policies and employee communications materials; and negotiating with plan service providers.

Roberta is best known for her work in the area of COBRA compliance and for advising employers in connection with the benefits they provide to employees’ domestic partners and same-sex spouses. She is a co-author of The COBRA Handbook and lectures and publishes articles on a variety of employee benefits topics. In addition, Ms. Chevlowe is a member of Proskauer’s Health Care Reform Task Force, and she led the Firm’s Domestic Partner Benefits Task Force.