On April 10, 2023, President Biden signed legislation to end the COVID-19 national emergency effective immediately, including ending the requirement to extend COBRA deadlines due to the COVID-19 pandemic. Plan administrators are now on the clock to move back to the pre-COVID COBRA rules.
Remember the Pandemic?
On May 4, 2020, the Internal Revenue Service (IRS) and the U.S. Department of Labor (DOL) issued a joint notice that provided relief for plan participants, qualified beneficiaries, and plan administrators from several applicable deadlines, including the deadlines for providing COBRA notices, making COBRA elections, and paying COBRA premiums. The intent of this tolling period was to help employees and plan administrators with unexpected issues while administering benefit plans during the COVID-19 pandemic.
According to the May 2020 notice and related guidance, the period from March 1, 2020, until 60 days after the announced end of the COVID-19 national emergency “or such other date announced” by the government would be disregarded when applying the various COBRA deadlines, called the “Outbreak Period.”
Because the pandemic dragged on, in February 2021, the IRS and DOL issued new guidance clarifying that the COVID-19 tolling period would be applied, on an individual basis, until the earlier of (1) one year from the date an individual was first eligible for the tolling relief or (2) the end of the Outbreak Period. Thus, every qualified beneficiary who was subject to a deadline expiring on March 1, 2020, or later would have until the one-year anniversary of that deadline to take the required COBRA action—whether that was making a COBRA election, premium payment, or notice.
Later in 2021, the IRS (along with the DOL and the U.S. Department of Health and Human Services (HHS)) clarified that the one-year tolling deadline applied concurrently with COBRA elections and initial premium payments. Thus, qualified beneficiaries would generally have only one year of total disregarded time to make COBRA elections and initial COBRA premium payments. Applying the COVID-19 tolling period for the deadline to make subsequent payments for COBRA coverage then required a “rolling” deadline.
Weary of the Pandemic? Let’s Just Declare It Over!
On February 10, 2023, the Biden administration announced its intention to end the COVID-19 national emergency on May 11, 2023. Then, on April 10, 2023, President Biden signed House Joint Resolution 7, immediately ending the emergency on that date. The logical conclusion was the Outbreak Period would then end on June 9, 2023 (60 days after April 10, 2023—the end of the COVID-19 national emergency), and the old COBRA rules would return on June 9, 2023.
But wait! The DOL has indicated that its intention is to end the Outbreak Period, for COBRA purposes, on July 10, 2023—notwithstanding the earlier end to the COVID-19 national emergency. In other words, it’s not over ‘til DOL says it’s over.
Therefore, per the declaration of the DOL, on July 10, 2023, plan administrators and employers will need to apply the normal (pre-pandemic) COBRA timing rules to COBRA election, payment, and notice deadlines, including:
- The 60-day deadline for qualified beneficiaries to elect COBRA coverage;
- The 45-day deadline for qualified beneficiaries to make an initial COBRA premium payment (subject to any special plan rule or grace period);
- The 30-day deadline for qualified beneficiaries to make subsequent COBRA premium payments (subject to any special plan rule or grace period); and
- The 14-day deadline for plan administrators (or 44 days if the plan administrator is the employer) to provide COBRA election notices to qualified beneficiaries.
Dealing with the New Old Rules: What To Do.
Plan administrators need to review prior communications sent to qualified beneficiaries regarding the tolling of COBRA election and premium payment periods and provide updated communications as necessary. Given that deadlines are calculated on an individual basis, a general notice describing the end of the COVID-19 pandemic and the impact on COBRA deadlines may be the better option in some situations, rather than a targeted individual communication. Of course, administrative processes should also be reviewed and adjusted to account for the end of the tolling requirement to avoid unintentionally extending COBRA deadlines beyond the end of the COVID-19 emergency.
