COBRA Premium Election and Grace Period Extensions
Overview Multiple COBRA deadlines have been extended until after the Outbreak Period. For these purposes the Outbreak Period is to be d isregarded for the following deadlines and premium grace periods for COBRA: • The 60-day deadline for individuals to notify the plan of a qualifying event • The 60-day deadline for individuals to notify the plan of a SS determination of disability • The 30-day deadline for employers to notify plan administrators of a COBRA event • The 14-day deadline for plan administrators to furnish COBRA election notices (44 days when combined with 30 days above) • The 60-day deadline for participants to elect COBRA • The 45-day deadline in which to make a first premium payment • The 30-day deadline for subsequent premium payments. Employer Action Considerations This ruling is not optional. As a practical matter, most COBRA administrators will administer COBRA elections and payments according to the standard, statutory guidelines . Administration will allow for the extended periods but will generally not default to them. What to Expect Coverage for Qualified Beneficiaries will typically be terminated if premiums are not paid within the normal 30-day grace period. However, Qualified Beneficiaries who wish to avail themselves of the extensions may do so by submitting elections, notifications, or premium payments beyond the normal deadline (but within the extended COVID-19 deadline). Coverage will then be retroactively reinstated activated after premium payment has been received. Employers should expect more retroactive enrollment and termination activity than normal in their COBRA population.
Relaxed Rules for Welfare Plan Administration
New Guidance Recognizing the difficulties faced by plan sponsors, administrators, and participants during the COVID-19 emergency, the DOL’s Employee Benefits Security Administration (EBSA) and the IRS have issued three guidance documents:
1. Joint rule 2. Formal notice 3. FAQ document
Together, these provide relief from certain pre-established deadlines for group health plans, other welfare benefits, and retirement plans. The guidance broadly extends numerous plan deadlines applicable to participants and administrators, and the rule gives several examples.
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