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DOL Guidance Impacts COBRA, Special Enrollment Periods, and Claims Procedures

Posted on April 30th, 2020

The U.S. Department of Labor (DOL) has issued guidance that will impact COBRA procedures, special enrollment periods, and claims procedures. The guidance will extend the length of certain time periods applicable to group health plans, disability plans and other welfare plans regulated by the ERISA law. Plan participants and beneficiaries will have additional time to do the following:

  • Take advantage of a special enrollment period required by HIPAA
  • Elect COBRA
  • Make COBRA premium payments
  • Notify the plan administrator of a COBRA qualifying event or a determination of a disability
  • File a claim for benefits
  • Appeal a claim that was denied in whole or in part
  • Request an external review of a final adverse benefit determination
  • File information to perfect a request for an external review

The guidance indicates that group health plans, disability plans and other welfare plans must disregard a period of time that is being called the “outbreak period.” The outbreak period began on the day the national emergency related to COVID-19 started (March 1, 2020), and it will end 60 days after the national emergency is over (a date is not yet known since the national emergency is still in place).

To “disregard” a period of time is to assume as if the period of time did not exist. This can best be illustrated with some examples using an assumption that the outbreak period ends on July 15, 2020. [1]

COBRA Election Period: John experiences a qualifying event on April 1, 2020. John will have until September 13, 2020 to elect COBRA. COBRA has a 60-day election period, and the clock starts ticking from the end of the outbreak period, not the date of the qualifying event.

COBRA Premium Payments: Barbara has paid her COBRA premium for February, but she has not made her March, April, May, June or July payments. Barbara will be considered to have made timely COBRA payments for the months of March through July if her premiums are paid by August 14, 2020. COBRA has a 30-day grace period for premium payments, and the clock starts ticking from the end of the outbreak period, not from the month in which the premium payment would normally be due.

Special Enrollment Period: Tom is covered by a group health plan from his own employer. His wife Lisa is covered by a group health plan from her own employer. Lisa’s employment has been terminated as of May 10, 2020, and she is losing her group health plan coverage as a result. Tom has until August 14, 2020 to add Lisa to his group health plan. HIPAA rules allow for a 30-day special enrollment period in this scenario, and the clock starts ticking from the end of the outbreak period, not the date Lisa’s employment was terminated.

Claim Submission: A health insurance company normally allows claims to be submitted within 365 days of the date of service. Michael incurs a claim on April 6, 2020. Michael can file a claim for benefits up until July 14, 2021. The clock starts ticking from the end of the outbreak period, not the date of service.

The DOL guidance can be found by clicking here. It is expected that additional guidance will be forthcoming to address potential new administrative procedures, notification requirements and other unanswered questions. Flex will be working diligently to understand and incorporate these changes to applicable benefit programs and administrative services.

 

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[1] The actual outbreak period end date will be identified at a later date. The July 15th date was used to illustrate how to “disregard” a period of time.

 

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