Are the COBRA and HIPAA Outbreak Periods Over on February 28, 2021?
We provided information at the end of April, 2020 about the IRS’ and DOL’s determination that the “pause” button was hit on a number of regular timing and payment due dates relating to COBRA, health plan claims and appeals (including health care FSA claims), and HIPAA Special Enrollment Periods due to the COVID-19 pandemic. In our previous post, we outlined how the National Emergency and subsequent Outbreak Period would allow plan participants to delay making certain elections and/or making required payments (e.g. for COBRA continuation coverage) until the end of the Outbreak Period, which was supposed to be 60 days after the end of the COVID-19 National Emergency, which was declared to begin on March 1, 2020.
Under ERISA as well as the National Emergencies Act, a national emergency can only last one year unless renewed by the President 90 days in advance of the end of the one year period by providing notice to Congress and publication in the Federal Register of the needed extension. Former President Trump did not provide such notice in December, and ERISA itself doesn’t provide the agencies the latitude to extend beyond one year. So let’s just say that at the time of this writing with just 10 days left before February 28, 2021, there is a bit of confusion as to how to handle what may mean the end of the pandemic’s National Emergency declaration and the “un-pause” of the prior paused timelines.
We expect that Congress and/or the agencies will try to rectify this shortly. Or rather, we hope they will. They have four possible choices:
- The IRS and DOL could announce that they’re extending the Outbreak Period another year, until February 28, 2022. We’re not sure there is legal authority for them to do so given the above, but it’s possible.
- The IRS and DOL could announce that the Outbreak Period (without the 60 day extension after the end of the declaration of a national emergency) is over February 28, 2021, and that on March 1, 2021 all of the “pause” buttons relating to COBRA elections, COBRA initial and back-payments, COBRA 30-day grace period payments, HIPAA Special Enrollment Periods, and health plan claims and appeals periods are starting/re-starting.
- The same as number 2 above, but with the 60-day Outbreak Period extension beginning to run on March 1, 2021, allowing employers and affected plan participants with notices that they have some more time to make decisions and/or payments.
- In an administratively difficult twist, allow that each individual affected participant has one year from the date of their own qualifying event (in the case of COBRA or HIPAA Special Enrollment Periods), or the individual’s date for the commencement of initial or ongoing payments to “pause” before the clock starts tolling again.
For the second option above, there’s further confusion that if this was the adopted approach, would employers or their COBRA administrators have sufficient time to provided notice to affected participants.
The third option above would give employers or their COBRA administrators time for such notices.
But of course, it’s the fourth option that seems to be getting a lot of last-minute attention in Washington DC.
Stay tuned. We’re hopeful for more guidance in the last few days of what would normally be a statutorily set end date.