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COBRA, Time Extensions, & Coronavirus

COBRA, Time Extensions, & Coronavirus

The Department of Labor (DOL) recently announced changes to COBRA, including time frame extensions, special enrollment periods, and claim deadlines. The changes are complex and are causing a lot of street and worry already. We are here to help sort through some of the challenges by providing some basic guidelines.

Since the Coronavirus pandemic was declared a National Emergency on March 13, the government has introduced the Families First Coronavirus Act and the CARES Act. Each of them offers different types of benefits for those who are finding this time financially difficult, including additional paid sick leave, the employer retention credit, and the stimulus money provided to individuals and families. Now we are seeing different changes that are leaving a lot of questions unanswered.

Extension of Time Frames

Filing and payment time frames have changed now for employee benefit plans, participants, and beneficiaries. These extensions provide additional time to make crucial health coverage, and other decisions affecting benefits during the COVID-19 pandemic. The Outbreak Period, established as of March 1, will end 60 days following the end of the National Emergency.

When is the National Emergency ending, you may ask. Well, here is the thing that is making this so confusing: NO ONE KNOWS. It could be the end of May, or June, or July. We just do not know. So, the Outbreak period will run for 60 days beyond when the National Emergency is over. 

COBRA

A person who has a qualifying event has 60 days beyond the Outbreak Period to elect COBRA coverage, and an additional 45 days to pay the premiums. On top of that, COBRA premiums due during the Outbreak Period are not delinquent if not paid and have a 30-day grace period for payment AFTER the Breakout Period expires.

Man...this is still confusing. I am not sure it is going to get more straightforward, either.

Special Enrollment Rights

Typically, an employee has 30 days to change coverage due to a special enrollment right. However, due to the Coronavirus, coverage decisions are now tolled between March 1 and 60 days following the end of the National Emergency (which we still don't know when will end). These special enrollment rights include:

  • Family changes, such as marriage, having a baby, or adopting a child
  • Coverage changes, such as the loss of spousal coverage

Claim Deadlines Tolled

We have heard a lot of questions when it comes to FSAs and HRAs concerning COVID-19. The recent rulings shed a bit of light on those subjects, although the light is coming through a dense fog. Reconciliations of FSAs and HRAs are extended until after the runout period of the plan is complete. The Outbreak Period, March 1 through the end of 60 days past the end of the National Emergency (still don't know), is NOT being counted in the days of the runout.

FSAs and HRAs often have runout periods between 30-90 days. The new time extension impacts the claims filed toward those plans. The Outbreak Period (March 1 + 60 days) is also carved out, meaning employees and providers will have more time to submit their claims.

So, yeah...

We know this is confusing. Use this graphic to get a better picture of the time frames. Stay in touch and connected with Medcom as we try our best to provide you the most up-to-date information as possible. We are in this together, and we will figure this out together.