At the beginning of the pandemic last spring, the IRS and DOL released extensions and relief for certain benefit plan deadlines. This relief targeted participant deadlines with respect to HIPAA, COBRA and ERISA and allowed for extensions for up to 60 days after the COVID-19 national emergency ends (referred to as the “Outbreak Period”). Of course, the Outbreak Period has lasted a lot longer than anyone anticipated, which has resulted in recent speculation if this deadline relief would expire after a year. Just two days before that one-year anticipated expiration date, on February 26, the IRS and DOL have finally released EBSA Disaster Relief Notice 2021-01.
This Notice clarified that the delayed participant deadlines must be applied on a rolling participant-by-participant basis until the earlier of:
- One year from the date the participant was first eligible for the relief, or
- 60 days from the announced end of the Outbreak Period (which, as of now, lasts until at least April 20, 2021).
The Notice outlines several examples to show how these deadlines should be applied to various scenarios that will be helpful for employer-sponsors to study. In no case is the participant deadline delayed for more than one year.
In addition, the new guidance provides information on plan sponsor notice relief that also began last spring. The plan sponsor relief also expires after a one-year period from the date of the relief. The guidance reminds plan sponsors of their fiduciary obligations to “act reasonably, prudently, and in the interest of the workers and their families who rely on their health, retirement, and other employee benefit plans for their physical and economic well-being.” Subsequently, if a plan sponsor knows that a beneficiary may be at the end of their relief period and about to lose benefits or rights under the plan, they should consider sending a notice out to advise the participant. Plan sponsors should also review any notices or amendments issued prior to or during the pandemic and amend or redistribute such notices, if information requires updating for accuracy.
Contact your Cowden representative for more information on this or other compliance issues.