Last year, the Internal Revenue Service (IRS) and the Department of Labor (DOL) issued two notices that extended certain benefit plan deadlines for both employees/plan participants and for plan administrators as a result of the COVID-19 national emergency (the “Original Notices”). A link to our article about these deadlines can be found here.
The Original Notices stated that, when determining the deadline for certain benefit-related actions, such as a HIPAA special enrollment or a COBRA election, the period from March 1, 2020 until 60 days after the end of the national emergency (the end of such 60-day period is referred to as the end of the “Outbreak Period”) should be disregarded. As an example, an employee whose COBRA election deadline was March 15, 2020 (15 days after the extension went into effect) would have until 15 days after the end of the Outbreak Period to make their COBRA election.
Embedded within the law that authorizes the IRS and DOL to delay these deadlines was a 1-year time limit. It was unclear how that limit applied, and some thought that the 1-year limit meant that the entire extension expired on February 28, 2021. Late last week, in EBSA Disaster Notice 2021-01, the DOL and IRS clarified that this is not the case. Rather, each individual deadline, determined on a per person basis, is subject to a 1-year time limit. So, using the same example above, the individual whose COBRA election was due on March 15, 2020 has a COBRA deadline of March 15, 2021. In sum, then, a particular deadline is determined by ignoring the Outbreak Period as described in the Original Notices, but in no event will any deadline be extended beyond 1 year.
In addition to this clarification, the DOL stated that plan fiduciaries may have a duty to notify individuals that a deadline is upcoming, if the fiduciary is aware of the deadline, and may need to revise prior notifications that did not clearly indicate how the extension – including the newly discussed 1-year time limit – applies to a particular deadline. This is in stark contrast to the Original Notices, which were silent about notification obligations.
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