As discussed in our prior blog post, on April 28, 2020, the Employee Benefits Security Administration, U.S. Department of Labor, Internal Revenue Service, and Treasury Department (the “Agencies”) published joint guidance extending certain important deadlines that are otherwise applicable to employee benefit plans. Specifically, the Agencies ordered that all employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the Internal Revenue Code of 1986 (the “Code”), as amended, must disregard certain legally-imposed deadlines for ERISA notice and disclosure requirements, claims procedures, COBRA elections and special enrollment elections over the period from March 1, 2020 until 60 days after the declared end of the COVID-19 National Emergency.
However, ERISA and the Code permit the Agencies to extend the deadlines for up to one year. Without further action, the relief provided in the joint guidance would have expired on February 28, 2021.
Last week, the Department of Labor released EBSA Disaster Relief Notice 2021-01 (the “Notice”) providing much-needed guidance to employers, administrators and participants on the duration of these deadline extensions. Under the Notice, the affected deadlines will be disregarded until the earlier of (a) one year from the date the plan or participant was first eligible for relief or (b) 60 days after the announced end of the National Emergency (the end of the “Outbreak Period”). In no case will a disregarded period exceed one year.
The Notice provides the following examples:
Essentially, this means that the deadline extensions will be applied on an individual-by-individual basis, which will likely present administrative complexities for employers. Plan sponsors should contact their third-party administrators to ensure that they can accommodate these individual deadlines.
The Notice states that the DOL recognizes that affected participants and beneficiaries may continue to encounter an array of problems due to the COVID-19 pandemic, even after the relief provided by the Notice expires. In this regard, the DOL encourages plan fiduciaries to make reasonable accommodations to prevent the loss of or undue delay in the payment of benefits, and to take steps to minimize the possibility of the loss of benefits because of a failure to comply with the pre-established time frames. Actions plan fiduciaries should consider include:
In considering these recommended actions, we anticipate that plan sponsors will need to issue an updated communication to plan participants which describes the impact of the Notice on existing election periods. This communication may, depending on the circumstances, include the issuance of an updated COBRA election notice. Since the Notice was issued on the last day of the original one-year period, plan sponsors may determine they need to extend election periods that otherwise would have expired on February 28, 2021 until a later date to allow time to discuss the impact of the Notice with third-party administration firms and to allow for such communications to be drafted and distributed to impacted participants and beneficiaries.
 The Notice states that the first date upon which an individual or plan could be eligible for relief was March 1, 2020. Therefore, the earliest date upon which a disregarded period can begin to run again is March 1, 2021.
 On February 24, 2021, President Biden announced that the COVID-19 National Emergency will continue.
The post U.S. Department of Labor Clarifies Extension of Certain Employee Benefit Deadlines Due to COVID-19 appeared first on Employee Benefits.
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