End of COVID-Related Timeframe Extensions Rapidly Approaching

November 19, 2020

The CARES Act amended ERISA §518 to expand the Secretary of Labor’s authority to postpone certain deadlines up to one year due to a public health emergency declared by the Secretary of Health and Human Services. Similarly, the Code authorizes the Secretary of the Treasury to extend certain deadlines for up to one year. 

On May 4, 2020 the DOL and the IRS (the “Agencies”) issued a joint notice titled Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak, (the “IRS/DOL Joint Notice”). The IRS/DOL Joint Notice extended certain timeframes under ERISA and the Code for group health plans, disability and other welfare plans, pension plans, and participants and beneficiaries of these plans during the COVID-19 National Emergency. The extension runs from March 1, 2020 until 60 days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification (the “Outbreak Period”).

Since the end of the Outbreak Period relies on governmental action that may occur after the maximum extension of one year allowed under ERISA and the Code, the relief provided under the IRS/DOL Joint Notice should not extend beyond one year after the beginning of the Outbreak Period (not later than February 28, 2021). The Agencies may announce the end of the Outbreak Period at any time and, subsequently, issue a new extension. However, as of today, there is no information of any intention of the Agencies to issue a new timeframes extension.

Plan sponsors and administrators should be aware of the imminent end to the relief provided under the IRS/DOL Joint Notice and start planning to rollback processes to the applicable regular timeframes effective March 1, 2021. Chard Snyder will continue monitoring this matter and will issue timely updates to you if necessary when we learn more.