IRS, DOL relax some health plan, COBRA enrollment deadlines

May 13--I understand new regulations were issued that give certain qualifying employees more time to enroll in their employer's medical plan during this pandemic.

Yes, recently published joint regulations from the IRS and the Department of Labor provide that employees must be given more time to enroll in their employer's medical plan following a special enrollment event, which includes things like a new marriage, new baby, etc. The regulations specifically provide that plan sponsors must disregard the COVID-19 "Outbreak Period" -- the period that began March 1 and ends on the 60th day after the day the National Emergency is declared to have ended -- when calculating these deadlines. For example, if the National Emergency is declared over on May 31, the Outbreak Period will end July 30.

How do the Outbreak Period regulations specifically change an employee's enrollment deadline following a special event?

Generally, the Health Insurance Portability and Accountability Act (HIPAA) allows employees a period of 30 days following the special enrollment event during which they can enroll in their employer's health plan. The new IRS relief regulations require employers to disregard the Outbreak Period in applying this 30-day period, which means that if an employee's special enrollment event occurs during the Outbreak Period, the employee's 30-day period for enrolling the plan does not begin until the Outbreak Period has ended. For example, if an employee had a new baby on March 2, that employee would typically have at least 30 days after that to enroll the new baby in their employer's medical plan. But under these new regulations, the 30-day period does not even start until the end of the Outbreak Period, which gives the employee significantly more time.

What about COBRA? How long does an employee who has experienced a COBRA qualifying event now have to make a COBRA continuing coverage election?

Like with the HIPAA enrollment period, the whole Outbreak Period must be disregarded when determining the participant's COBRA election period and when determining the date by which a qualifying beneficiary must notify the plan of a qualifying event. If a participant experienced a COBRA qualifying event and received his COBRA election notice in March, the participant now has until 60 days following the last day of the Outbreak Period to file his COBRA election.

How does the Outbreak Period affect when COBRA premium payments are due? Can employers terminate COBRA coverage for individuals who are more than 30 days behind on COBRA payments?

The whole Outbreak Period is disregarded for purposes of determining whether monthly COBRA premium payments are timely made. Normally, COBRA participants have a 30-day grace period to make monthly premium payments. However, because we disregard the Outbreak Period, a COBRA participant would have until 30 days following the end of the Outbreak Period to make COBRA premium payments for any months during the Outbreak Period. Thus, if the National Emergency ended on May 31, and the Outbreak Period ended July 30, the COBRA participant would have until Aug. 29 to make his payments for March, April, May, June and July.

What do employers need to do to implement these temporary rule changes?

While these new rules offer notable relief to those individuals affected, it can create administrative and record-keeping challenges for plan administrators, especially if the qualifying health plan event occurred just prior to March 1. For example, an employee who got married on February 14 now only has 15 days, not 30 days, after the Outbreak Period has ended to add her spouse to her company's medical plan because 15 days had already elapsed before the Outbreak Period started. It's important for plan administrators to accurately calculate, calendar and track each individual's amended deadlines caused by the Outbreak Period.

Paula Burkes, Business writer

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