Department of Labor (DOL) Issues Guidance on Extension of Disaster Relief & Benefits Time Frame Extensions
March 8, 2021
On Friday, February 26, 2021, the Department of Labor (DOL) released EBSA Disaster Relief Notice 2021-01, which provides guidance on the duration of COVID-related relief and the National Emergency “Outbreak Period.”
This notice provides that under Section 518 of ERISA and Section 7508A(b) of the Code, the benefits timeline extension rules are limited by statute to a period of one year from the date the individual action would otherwise have been required or permitted.
Effectively, the guidance indicates that all of the "pause" buttons for benefits timeline extensions are now on an individual-by-individual rolling basis.
Individuals and benefit plans with time frames that are subject to the relief will have the regular applicable periods disregarded until the earlier of:
- one year from the date they were first eligible for relief, or
- 60 days after the announced end of the National Emergency (the end of the Outbreak Period).
On the applicable date, the time frames for individuals and benefit plans with periods that were previously disregarded under the Notices will resume. In no case will a disregarded period exceed one year.
Examples to Illustrate Relief Duration
- If a FSA plan participant incurred a service on 2/1/2021, they would normally have been required per their plan document to submit their claim in a certain number of days. They may now extend the period by one year or 60 days after the National Emergency (which remains ongoing) is declared to be over, whichever comes first. This time would be added for the determination of the date the claim needs to be submitted.
- If a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, that election requirement would be delayed until the earlier of one year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.
- If a plan would have been required to furnish a notice or disclosure by March 1, 2020, the relief would end with respect to that notice or disclosure on February 28, 2021. The responsible plan fiduciary would be required to ensure that the notice or disclosure was furnished on or before March 1, 2021.
In all of these examples, the delay for actions required or permitted that is provided by the Notices does not exceed one year.
Next Steps
Chard Snyder is working diligently to determine next steps considering the February 28, 2021 deadline has passed for certain individuals. Once steps to comply with this new guidance are in place, we will communicate any specific directions.