Plan Administrators: (Re)Start Your Timers: Deadlines Extended by COVID Have One-Year Limit

Notice 2021-01 recently issued by the Employee Benefits Security Administration, provides helpful clarification on relief from certain participant deadlines issued last year.  However, it also provides “suggestions” that plan administrators should consider following to avoid potential liability.

In last year’s Notice 2020-01 issued in April 2020, EBSA announced that plans must disregard the coronavirus “Outbreak Period” when calculating the following plan deadlines:

• HIPAA Special Enrollment under a group health plan;
• COBRA elections, premium payments, and notice of certain changes; and
• Claims and appeals under the plan (applicable to both retirement and welfare plans).

The Outbreak Period begins March 1, 2020 and runs until sixty (60) days after the announced end of the National Emergency. The end of the COVID-19 National Emergency has not been announced.  However, the authority under which this relief was issued limits any extension of deadlines to one year.

The new guidance clarifies that these deadlines will be extended by disregarding the period beginning on the date the person was first eligible for relief (which was as early as March 1, 2020) and ending on the date that is the earlier of:

• One year from the date the person was first eligible for relief, or
• 60 days after the announced end of the National Emergency.

Thus, any relief that began on March 1, 2020, will end on February 28, 2021, triggering the time period for filing any claims or appeals to again run beginning March 1, 2021.  The chart below provides some examples of how the one-year statutory limit impacts benefit plan deadlines.

However, perhaps more importantly than the deadline guidance, Notice 2021-01 notes that plan fiduciaries must make “reasonable accommodations” to minimize the possibility of individuals losing benefits/rights because of a failure to comply with deadlines.  Specific actions the Notice says a fiduciary “should consider” doing, include:

1. Sending a notice regarding the end of the relief period when the administrator/fiduciary knows, or should reasonably know, that an individual will be impacted by the end of the relief period.
2. Reviewing any claims procedures notices sent prior to or during the National Emergency period for any failure in the disclosures to provide accurate timeframes/deadlines to participants and beneficiaries on when they were required to take action.

While these are not phrased in the notice as mandates, fiduciaries should strongly consider taking these actions to minimize any claims by participants or government investigators.  If these particular steps are not practical for the plan, the administrator should document that fact and investigate implementing whatever other “reasonable accommodations” it can to address the impending end of the relief period for affected participants.