In late February, the Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) issued Notice 2021-01 regarding benefit plan deadlines. Specifically, the notice provides guidance on the duration of COVID-19-related deadline extensions first provided by the EBSA back in 2020. That relief was part of Notice 2020-1 and a Joint Notice provided by the DOL, Treasury Department, and the IRS. The release of Notice 2021-01 follows recent EBSA-issued guidance on new fiduciary investment advice guidelines.
Background of Notice 2020-01 and the Joint Notice
Previously, Notice 2020-01 and the Joint Notice provided relief for actions related to employee benefit plans and benefit plan deadlines. This relief is part of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). It is also permitted under the Internal Revenue Code (Code). It focused on plan participants and beneficiaries, employers, plan sponsors, plan fiduciaries, and others impacted by the coronavirus outbreak.
As mentioned above, ERISA and the Code provide that any employee benefit plans affected by disaster could receive deadline extensions. Moreover, the DOL and the Treasury can prescribe a period of up to one year for specific deadlines. The benefit plan deadlines include due dates:
- to elect COBRA;
- for payment of COBRA premiums;
- to elect HIPAA special enrollment;
- to file claims, appeals, and requests for external review; and
- for plans to provide COBRA election notices.
Under Notice 2020-01 and the Joint Notice, a one-year relief period began on March 1st, 2020. One year from March 1st, 2020, was February 28th, 2021, and as of that date, the deadline extensions expired. Consequently, as February 28 approached, the EBSA started to receive inquiries about the possible continuation of relief beyond that date.
Overview of Notice 2021-01
On February 26th, 2021, the EBSA released Notice 2021-01 (Notice). The Notice clarifies that any new extended participant deadlines only apply on a case-by-case basis. Specifically, the notice suspends deadlines beginning on or after March 1st, 2021, for one year from the original date. In some cases, the new deadline might be 60 days after the date the COVID-19 National Emergency period ends. (As of the date of this post’s publication, that emergency period has not ended.) For example, if a qualified beneficiary needs to make a COBRA election by April 1st, 2021, the deadline is:
- April 1st, 2022; or
- 60 days from the end of the COVID-19 National Emergency period.
Consequently, any requirements that were in effect to make elections by March 1st, 2020, did expire on February 28th, 2021. Those deadlines were not extended and are now considered as “missed.”
Employer Takeaways
In conclusion, Notice 2021-01 contains very important information that employers need to learn and understand. Employers also need to review and update any existing documents affected by the extension of benefit plan deadlines. For instance, employers should examine and revise any affected COBRA notices, claims notices, appeals notices, special enrollment rights notices, and summary plan description language. Additionally, employers should provide notices to individuals about any changes to the benefit plan deadlines that would affect them.