Coming to the End of a Long and Winding Road

COVID-19 relief for group health plans has been winding down over the last couple of years, and one of the last parts to expire is the outbreak period deadline extensions, which are set to end in relationship to the end of the national emergency. The outbreak period rule applies retroactively, requiring plans to put deadlines on hold starting March 1, 2020 through the end of the “outbreak period,” defined as 60 days following the end of the national emergency, or any other date announced by the Department of Labor (DOL) and Internal Revenue Service (IRS) in subsequent guidance.

On April 10, 2023, President Biden signed Joint House Resolution (H.R.) 7 into law which ended the national emergency effective that day. The signing of the resolution ends the national emergency sooner than expected, as the Biden administration’s early Administrative Policy announcement indicated plans to end the national emergency and public health emergency on May 11, 2023.

The IRS, DOL, and Department of Health and Human Services (HHS) (“the Agencies”) jointly released Frequently Asked Questions (FAQ) Part 58 on March 29, 2023, to provide information on how the end of the public health emergency and national health emergency would impact group health plans and to help illustrate how the various outbreak period deadlines would unwind. This was welcome guidance as the Agencies offered examples of the transition back to pre-COVID deadlines, however it should be noted that FAQ Part 58 is based upon the earlier planned end to the national emergency on May 11, 2023.

How does H.R. 7 impact employee benefit plans?

The DOL has informally remarked that H.R. 7 does not change the May 11 date for purposes of deadline extensions. Formal guidance would be welcome. In the meantime, it appears reasonable to follow the DOL’s informal guidance.

The Centers for Medicare and Medicaid Services (CMS) has formally commented on their website that H.R. 7 will not have any impact on the planned end of the public health emergency on May 11, 2023.

Which timeframes are affected?

The outbreak period rule applies to all the following timeframes:

COBRA Continuation Coverage

• 60-day election period
• 45-day initial premium payment deadline
• 30-day grace period for monthly COBRA premium payments
• 60-day period for individuals to provide notice of a qualifying event to the employer, or notice of a disability determination
• 14-day period for plans to provide election notices to qualified beneficiaries (44 days if the employer is the plan administrator)

Health and Disability Claims

• Claim filing deadlines (set by the plan)
• 180-day period for participants to appeal claim denials
• Deadlines for requesting external review and related timeframes

Special Enrollment

• 30-day period allowing enrollment due to loss of other coverage, or life events such as marriage, birth, adoption, or placement for adoption
• 60-day period allowing enrollment after loss of CHIP or Medicaid coverage

Do I need to provide a special notification to COBRA enrollees, health care FSA or HRA participants about the end of the outbreak period?

At this time, the guidance doesn’t include specific notices that employers or administrators must provide to COBRA enrollees, and/or health flexible spending account (FSA) and health reimbursement arrangement (HRA) participants, although it has been recommended. EBC will have sample employee communications available in the employer online account for our clients to use.

How do I unwind the extensions?

The unwinding of the outbreak period deadline extensions will be dependent upon whether the individual deadline for COBRA, HIPAA Special Enrollment, Claims Runout Period, and Claims Appeal has reached the maximum 365-day extension prior to the end of the national emergency or if the deadline had been paused during the outbreak period and will again be applied after the end of the outbreak period (July 10, 2023).

Let’s look at a few COBRA examples from FAQ Part 58:

Example 1 from FAQ Part 58 (Electing COBRA)

Facts: Joan works for ABC Company and participates in ABC Company’s group health plan. Joan experiences a qualifying event for COBRA purposes and loses coverage on April 1, 2023. Joan is eligible to elect COBRA coverage under ABC Company’s plan and is provided a COBRA election notice on May 1, 2023.

What is the deadline for Joan to elect COBRA?

Conclusion: The last day of Joan’s COBRA election period is 60 days after July 10, 2023 (the end of the outbreak period), which is September 8, 2023.

Example 3 from FAQ Part 58 (Electing COBRA)

Facts: Let’s use the same facts as Example 1, except the qualifying event and loss of coverage occur on July 12, 2023, and Joan is eligible to elect COBRA coverage under ABC Company’s plan and is provided a COBRA election notice on July 15, 2023.

What is the deadline for Joan to elect COBRA?

Conclusion: Because the qualifying event occurred on July 12, 2023, after the end of both the COVID-19 national emergency and the outbreak period, the extensions under the emergency relief notices do not apply. The last day of Joan’s COBRA election period is 60 days after July 15, 2023, which is September 13, 2023.

Example 4 from FAQ Part 58 (Paying COBRA Premiums)

Facts: Helen participates in Jumping Bean’s group health plan. Helen has a qualifying event and receives a COBRA election notice on October 1, 2022. Helen elects COBRA continuation coverage on October 15, 2022, retroactive to October 1, 2022.

When must Helen make the initial COBRA premium payment and subsequent monthly COBRA premium payments?

Conclusion: Helen has until 45 days after July 10, 2023 (the end of the outbreak period), which is August 24, 2023, to make the initial COBRA premium payment. The initial COBRA premium payment would include the monthly premium payments for October 2022 through July 2023. The premium payment for August 2023 must be paid by August 30, 2023 (the last day of the 30-day grace period for the August 2023 premium payment). Subsequent monthly COBRA premium payments would be due the first of each month, subject to a 30-day grace period.

EBC Commentary on COBRA Deadline Examples:

• If you experienced an event date* between March 1, 2020 – July 10, 2022, you would be eligible for a maximum 1-year extension on your deadline.
• If you experience an event date* between July 11, 2022 – July 10, 2023, you would be eligible for an extension, however you will not receive a full year extension due to the end of the outbreak period. Your plan would begin counting your deadline as of July 11, 2023 (the day after the end of the outbreak period).
  • For 30-day deadlines, your new deadline would be August 9, 2023.
  • For 45-day deadlines, your new deadline would be August 24, 2023.
  • For 60-day deadlines, your new deadline would be September 8, 2023.
• If you experience an event date* on or after July 11, 2023, deadline extensions do not apply as the outbreak period has already ended.

*Event date could be any date which starts the counting of a deadline period, for example, the date a QB is sent an Election Notice (or if later, the date of their qualifying event), a premium due date, or the date a QB makes and election (beginning a 45-day deadline to make the first premium payment).

Let’s look at a few HIPAA Special enrollment examples:

Example 5 from FAQ Part 58 (Special Enrollment Period)

Facts: Rachel works for PBJ, Inc. Rachel is eligible for PBJ, Inc.’s group health plan, but previously declined participation. On April 1, 2023, Rachel gave birth and would like to enroll herself and the child in PBJ, Inc.’s plan. However, open enrollment does not begin until November 15, 2023.

When may Rachel exercise her special enrollment rights?

Conclusion: Rachel and her child qualify for special enrollment in PBJ, Inc.’s plan as early as the date of the child’s birth, April 1, 2023. Rachel may exercise her special enrollment rights for herself and her child until 30 days after July 10, 2023 (the end of the outbreak period), which is August 9, 2023, if she pays the premiums for the period of coverage after the birth.

Example 7 from FAQ Part 58 (Special Enrollment Period)

Facts: Let’s use the same facts as Example 5, except that Rachel gave birth on July 12, 2023.

When may Rachel exercise her special enrollment rights?

Conclusion: Rachel and her child qualify for special enrollment in PBJ, Inc.’s plan as of the date of the child’s birth, July 12, 2023. Because Rachel became eligible for special enrollment on July 12, 2023, after the end of both the COVID-19 national emergency and the outbreak period, the extensions under the emergency relief notices do not apply. Rachel may exercise her special enrollment rights for herself and her child until 30 days after July 12, 2023, which is August 11, 2023, if she pays the premiums for the period of coverage after the birth.

EBC Commentary on Special Enrollment Period Examples:

• If you experienced a HIPAA Special Enrollment Right event between March 1, 2020 – July 10, 2022, you would be eligible for a maximum 1-year extension on your notification to your employer or administrator.
• If you experience a HIPAA Special Enrollment Right event between July 11, 2022 – July 10, 2023, you would be eligible for an extension, however you will not receive a full year extension due to the end of the outbreak period. Your plan would begin counting your election change window as of July 11, 2023 (the day after the end of the outbreak period).
  • For 30-day deadlines, your new deadline would be August 9, 2023.
  • For 60-day deadlines, your new deadline would be September 8, 2023
• If you experience a HIPAA Special Enrollment Right event on or after July 11, 2023, deadline extensions do not apply as the outbreak period has already ended.

Let’s look at a health care claim example:

Example (Runout Period)

Facts: ABC Company offers a health care FSA on a calendar year basis. The plan has a 3-month runout period (claims can be submitted through March 31 for the prior plan year).

What is the deadline for a participant to submit a claim against their 2021 plan year? What about the 2022 plan year and the 2023 plan year?

Conclusion:

• For the 2021 plan year, the runout period typically would have ended March 31, 2022. Due to the maximum one-year extension, participants can submit claims through March 31, 2023.
• For the 2022 plan year, the runout period typically would have ended March 31, 2023. Due to the end of the outbreak period occurring prior to a one-year extension, participants can submit claims through October 10, 2023 (3-months after the end of the outbreak period).
• For the 2023 plan year, the runout period will end March 31, 2024. No deadline extensions would apply since the outbreak period previously ended.

EBC Commentary on Health Care Claim Examples:

• For any runout period or appeal submission deadlines that began between March 1, 2020 – July 10, 2022, you would be eligible for a maximum 1-year extension on your notification to your employer or administrator.
• For any runout period or claim appeal submission deadlines that begins between July 11, 2022 – July 10, 2023, you would be eligible for an extension, however you will not receive a full year extension due to the end of the outbreak period. Your plan would begin counting your claim runout or appeal submission window as of July 11, 2023 (the day after the end of the outbreak period).
  • For 90-day deadlines, your new deadline would be October 8, 2023.
  • For 180-day deadlines, your new deadline would be January 6, 2024
• For any runout period or claim appeal submission deadlines that begin on or after July 11, 2023, deadline extensions do not apply as the outbreak period has already ended.

How do I get more information?

Join Employee Benefits Corporation on April 26, 2023, at 11 AM for our webinar on the end of the national emergency. In this webinar, we will take a deeper dive into scenarios that will help you understand how to unwind the outbreak period deadline extensions.