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U.S. Department of Labor Issues COVID-19 Relief for Employee Benefit Plans

 

On April 28, 2020, the U.S. Department of Labor (DOL) released guidance for employee benefit plans aimed at providing relief to plan participants and qualified beneficiaries during the COVID-19 national health emergency. Specifically, the DOL’s goal is to minimize the possibility of individuals losing benefits due to a failure to adhere to certain timeframes established under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC). Accordingly, these timeframes are temporarily extended effective immediately.

 

Applicable Plans

The temporary extension of timeframes under ERISA and IRC applies to group health plans, disability, and other welfare plans, including Health FSAs and HRAs. Some of the extensions may not apply to plans that are exempt from ERISA, such as state and local government plans and church plans.

Notably, the Department of Health and Human Services has indicated that it may adopt similar measures under the Public Health Service Act, and it encourages plan sponsors of non-Federal governmental group health plans and health insurance issuers to operate in a manner consistent with this DOL-provided relief.

 

Extension of Timeframes

Plan sponsors are required to disregard the period of time from March 1, 2020 until 60 days following the announced end of the COVID-19 national health emergency when determining the following periods.

 

Employer Action

In response to this DOL guidance, employer-sponsors should immediately identify which of their group health and welfare plans are affected. Many employer-sponsors will be able to coordinate with third parties to implement these temporary timeframe extensions, such as insurance carriers, claims administrators, and COBRA administrators, and should confirm with these third parties that the timeframe extensions will be honored.

In most cases, these temporary extensions will not warrant a plan amendment or distribution of a Summary of Material Modification (SMM). Further, the DOL’s guidance does not contain an explicit requirement that employer-sponsors provide any sort of notice to plan participants and beneficiaries regarding these extensions. Therefore, employer-sponsors likely have discretion over the form and manner of notice.

Finally, the guidance makes clear that the DOL will continue to monitor the effects of the public health emergency and may provide additional relief as warranted. As a result, employer-sponsors should remain alert for future instruction from the DOL.

 

ADDITIONAL RESOURCES

U.S. Department of Labor’s Notice on Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak

https://www.dol.gov/sites/dolgov/files/ebsa/temporary-postings/covid-19-final-rule.pdf

U.S. Department of Labor’s COVID-19 FAQs for Participants and Beneficiaries

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/covid-19.pdf

EBSA Disaster Relief Notice 2020-01

https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2020-01

 


 

 

Posted by in Blog, Health & Benefits, Human Resources

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