Action Items Required for COBRA

What does this mean for you, as the broker? 

Be ready to share the following two items with your clients.

What is Already Familiar: As you know, under Federal law, COBRA allows certain employees (and their families), who would otherwise lose their group health coverage due to certain qualifying events, to continue their group health coverage for a period of time. COBRA qualifying events include termination or reduction in hours, death of a covered employee, divorce or legal separation, Medicare entitlement, and loss of dependent status.

New Going Forward: The Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Agencies”) recently released rules and guidance that affect the content of federal COBRA model notices, as well as deadlines for certain participant actions related to the election of COBRA continuation coverage during the 2019 Coronavirus (“COVID-19”) National Emergency.

1. New Model General and Election Notices

On May 1, 2020, the Department of Labor (“DOL”) issued

• The updated COBRA model notices (General Notice and Election Notice), which now includes language about Medicare as an alternative to COBRA continuation coverage.
  • You can download the updated model General Notices and Model Election Notices on the DOL’s website in modifiable, electronic form here.
• Please note: This change is unrelated to the COVID-19 National Emergency.
• To help, they also provided a revised Frequently Asked Questions.

The DOL guidance eliminates the previous versions of the model General and Election Notices.

The DOL considers the use of the model notices available on its website, when appropriately completed, to constitute compliance with the notice content requirements of COBRA. Any previous versions of these notices should be replaced, and the new model notices should be downloaded, customized, and used as soon as possible.

2. Deadlines Extended for Some COBRA Participant Actions

On May 4, 2020, the Agencies issued new final rules (“Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak”) that:

• Require Plan Administrators to disregard the period from March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or such other date announced by the Agencies in any future notice (“Outbreak Period”)
• This applies to the following when determining the deadline for any of the following COBRA-related participant actions:
  • The 60-day election period for COBRA continuation coverage after receipt of the COBRA Election Notice;
  • The date for making COBRA premium payments (e.g. 45-day initial payment deadline and/or 30 day grace period for subsequent payments)
  • The 60-day period for individuals to notify the plan of a COBRA qualifying event (e.g. divorce/legal separation, child attaining age 26, or SSA disability determination); and,
  • Plan Administrators must disregard the Outbreak Period when determining the deadline for providing a qualified beneficiary with the COBRA Election Notice.

In addition to the above COBRA-related actions, these final rules extend the deadlines for the following participant actions:

• The 30-day period (or 60-day period, if applicable) to request HIPAA special enrollment;
• The date within which individuals may file a benefits claim under the plan’s claims procedure; and
• The dates within which claimants may file an appeal of benefits determinations or external reviews.

The final rules include helpful examples for each type of deadline extension noted above, which use April 30, 2020 as the assumed end-date of the National Emergency.

However, the Agencies confirm that this date was used simply to make the examples clear and understandable.

The assumed April 30 end-date results in an Outbreak Period running from March 1, 2020 through June 29, 2020 (the 60^th day after the assumed end of the National Emergency).

The Agencies intend on issuing additional guidance after the actual length of the Outbreak Period or Outbreak Periods becomes available.

Update from ERISA Desk:

The legislative amendment/SMM for our Wrap Plan Documents and SPDs will be issued to clients later this year. These changes currently incorporate the removal of the over-the-counter drug limitation on reimbursements from account-based group health plans (FSA, HSA, HRA) and the short-term benefit-protected COVID-19 leaves provided for under the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”).