Clearing Up the End of the National Emergency Employee Benefits Confusion
UPDATED INFORMATION AS OF 4/28/2023: On Monday, April 10, President Biden signed the resolution ending the National Emergency that was declared in response to COVID-19. However, the Departments appear to be holding firm on their informal comments that they will treat May 11, 2023, as the end of the National Emergency. Without cluttering the situation too much, the idea hinges on the fact that while there may be legislation declaring the National Emergency over, it is ultimately up to FEMA (under the Stafford Act) to decide when the National Emergency, as it relates to the Outbreak Period guidance issued by the Departments, is over. Every indication as of the writing of this update is that FEMA will declare the end of the National Emergency as of May 11, 2023. While formal guidance from the Departments would be appreciated, there is a chance that their informal comments are the most that the Departments will provide ahead of May 11. As a result, we have updated the dates in our posting to reflect the likely result that the Departments will consider May 11, 2023, to be the end of the National Emergency, with the Outbreak Period ending on July 10, 2023. We will continue to update these materials as more information becomes available.
The Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (the “Departments”) released FAQ guidance on March 29, 2023, clarifying their approach to the end of the COVID-19-induced Public Health Emergency and the National Emergency.
One piece of the guidance of note was the Departments’ approach to the end of the Outbreak Period, which is the timeframe between the start of the National Emergency (March 1, 2020) and 60 days after the declared end of the National Emergency (proposed May 11, 2023, but potentially sooner). The relief, in part, applies to:
- Extended time to request a HIPAA special enrollment
- Extended COBRA election period/premium payments/notification of QE/disability determination
- Extended date for providing COBRA election notice
- Extended date to file a claim or to appeal adverse benefit determination
From past guidance, a common interpretation was that an individual’s extension to elect and pay for COBRA as well as to notify the plan sponsor of a HIPAA special enrollment event stretched from, “…the date each individual or plan was first eligible for relief…until the earlier of (a) 1 year from the date they were first eligible for relief, or (b) 60 days after the announced end of the COVID-19 National Emergency.” Timeframes are applied on an employee-by-employee basis, with each impacted employee having their own relief period.
This prior guidance led to mixed interpretations, one being that an individual’s relief period could not extend beyond the end of the Outbreak Period (reminder: 60 days after the end of the National Emergency).
Clarifications to the Timeframes
The new FAQs instead state that any individual who is still in their relief period at the end of the Outbreak Period will then have the standard period that they would have had, but for their relief period, to take the action that applied to them, as listed above. The FAQs provide a series of examples to illustrate this relief.
As a result of the FAQs, individuals who are still in their relief period at the end of the Outbreak Period, meaning that one year has not transpired from when they became eligible for the relief, will have an additional:
- 30 days to request a HIPAA special enrollment (or 60 days if the special enrollment is due to the loss of Medicaid or CHIP coverage)
- 60 days to notify the plan of a COBRA triggering event
- 60 days to elect COBRA coverage
- 45 days to make their initial payment for COBRA coverage (which would include premiums for past months of coverage).
Do note: the list above is not exhaustive or all inclusive.
Example Situations Your Employees May Face
The following sample of examples from the FAQs assume that the National Emergency ends on May 11, 2023, and as a result, the Outbreak Period ends on July 10, 2023. The examples should only be used for illustrative purposes if the National Emergency is declared over sooner than May 11, 2023.
Facts: Individual A works for Employer X and participates in Employer X’s group health plan. Individual A experiences a qualifying event for COBRA purposes and loses coverage on April 1, 2023. Individual A is eligible to elect COBRA coverage under Employer X’s plan and is provided a COBRA election notice on May 1, 2023.
What is the deadline for Individual A to elect COBRA?
Conclusion: The last day of Individual A’s COBRA election period is 60 days after July 10, 2023 (the end of the Outbreak Period), which is September 8, 2023.
Paying COBRA Premiums
Facts: Individual B participates in Employer Y’s group health plan. Individual B has a qualifying event and receives a COBRA election notice on October 1, 2022. Individual B elects COBRA continuation coverage on October 15, 2022, retroactive to October 1, 2022.
When must Individual B make the initial COBRA premium payment and subsequent monthly COBRA premium payments?
Conclusion: Individual B has until 45 days after July 10, 2023 (the end of the Outbreak Period), which is August 24, 2023, to make the initial COBRA premium payment. The initial COBRA premium payment would include the monthly premium payments for October 2022 through July 2023. The premium payment for August 2023 must be paid by August 30, 2023 (the last day of the 30-day grace period for the August 2023 premium payment). Subsequent monthly COBRA premium payments would be due the first of each month, subject to a 30-day grace period.
Special Enrollment Period
Facts: Individual C works for Employer Z. Individual C is eligible for Employer Z’s group health plan, but previously declined participation. On April 1, 2023, Individual C gave birth and would like to enroll herself and the child in Employer Z’s plan. However, open enrollment does not begin until November 15, 2023.
When may Individual C exercise her special enrollment rights?
Conclusion: Individual C and her child qualify for special enrollment in Employer Z’s plan as early as the date of the child’s birth, April 1, 2023. Individual C may exercise her special enrollment rights for herself and her child until 30 days after July 10, 2023 (the end of the Outbreak Period), which is August 9, 2023, as long as she pays the premiums for the period of coverage after the birth.
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Our Holmes Murphy team of experts will continue to monitor the guidance and will provide additional information if necessary. In the meantime, please don’t hesitate to ask your Holmes Murphy service team if you’d like to discuss the situation further.
Published on: 04.10.23