Whether you are an employer plan sponsor or a plan participant, you can breathe a little easier knowing that DOL and the IRS has given you the gift of time. The final rule issued this week extends certain notification deadlines for plans covered under ERISA or the Internal Revenue Code during the period of national emergency due to COVID-19. The rule provides that the period from March 1, 2020, to 60 days after the announced end of the national emergency, called the “outbreak period,” must be disregarded for purposes of many plan notification requirements described below.
HIPAA Special Enrollment Periods
Under HIPAA, group health plans must offer otherwise eligible individuals an opportunity to enroll in coverage if it was originally declined under certain circumstances. Those include:
- an employee or dependent’s loss of other group health plan coverage;
- an eligible employee’s acquisition of a new dependent through marriage, birth, or adoption, or placement for adoption; and/or
- loss of Medicaid or CHIP coverage or becoming eligible for a state premium assistance subsidy under Medicaid or CHIP.
Generally, eligible employees must request enrollment under the terms of the plan within 30 days of a special enrollment event (or within 60 days of loss of Medicaid/CHIP or becoming eligible for state premium assistance subsidy). Because the outbreak period must be disregarded for purposes of determining if a timely request for enrollment was made, employees experiencing a special enrollment event will have until 30 or 60 days after the outbreak period has ended to enroll. For example, an individual who has a baby on May 1st, 2020, will have 30 days after the outbreak period ends to enroll the new dependent.
COBRA rules give qualified beneficiaries 60 days to elect continuation of coverage and 45 days after the date of election to make a payment. Continuation may be terminated if premium is not paid on time. Premium is considered on time if it is paid within 30 days of the date for the which the premium is due.
For purposes of determining timely election and payment of premiums, the outbreak period must again be disregarded. These time frames will apply once the outbreak period ends. This is true for the 60-day COBRA election period and the dates for making COBRA premium payments.
The same is also true for other required notices including:
- the notice that the employer or participant must give the plan when coverage is lost;
- the COBRA election notice the plan must give a qualified beneficiary when coverage ends; and
- the 60-day notification a qualified beneficiary must give the plan due to disability.
A participant whose group health plan coverage ends due to termination of employment on March 31st, 2020, has 60 days from the date of the end of the outbreak period to elect continuation of coverage under COBRA.
Claims Procedures and External Review
ERISA requires that plans establish a reasonable procedure governing the filing, determination, and appeal of benefit claims. This includes providing participants a reasonable opportunity to appeal adverse benefit determinations. Further, group health plans and disability plans must provide participants at least 180 days following receipt of an adverse benefit determination to appeal (60 days in the case of other welfare benefit plans).
Additionally, ERISA sets forth standards for external review that apply to non-grandfathered group health plans and health insurance issuers offering non-grandfathered group health insurance coverage and provides for either a state external review process or a federal external review process. Standards for external review processes and time frames for submitting claims to the independent reviewer for group health plans or health insurance issuers may vary depending on whether a plan uses a state or federal external review process. For plans or issuers that use the federal external review process, the process must allow at least four months after the receipt of a notice of an adverse benefit determination or final internal adverse benefit determination for a request for an external review to be filed. The federal external review process also provides for a preliminary review of a request for external review. The regulation provides that if such request is not complete, the federal external review process must provide for a notification that describes the information or materials needed to make the request complete, and the plan or issuer must allow a claimant to perfect the request for external review within the four-month filing period or within the 48-hour period following the receipt of the notification, whichever is later.
For purposes of both claims appeal and request for external review, the outbreak period must be disregarded when determining the date by which a participant must file a request for appeal, a request for external review, and for making the external review process complete.
While this relief is welcome, especially for employers whose businesses may be temporarily closed due to the pandemic, these new rules will take some getting used to. The timing is a little tricky. The important thing to remember is that the clock really begins 60 days after the date the national emergency ends.
Please contact your HORAN representatives for additional information.