Participant Extensions

A final rule extends the timeframes for health plan participants to: Request special enrollment under HIPAA;Elect COBRA continuation coverage, pay COBRA premiums and notify the plan of a COBRA qualifying event; andFile benefit claims and appeals and request external review of denied claims.

COVID-19 Relief Extends Certain Employee Benefit Plan Deadlines

On April 28, 2020, the Departments of Labor (DOL) and the Treasury (Departments) issued deadline relief to help employee benefit plans, plan participants and plan service providers impacted by the COVID-19 outbreak.

This Compliance Overview summarizes the participant deadline extensions affecting COBRA continuation coverage, special enrollment periods, claims for benefits, appeals of denied claims and external review of certain claims.

It also includes the deadline extension pursuant to the DOL’s Disaster Relief Notice 2020-01, for notices and disclosures required under the Employee Retirement Income Security Act (ERISA).

ERISA Notices & Disclosures

DOL Disaster Relief Notice 2020-01 extends the time for plan officials to furnish benefit statements and other notices and disclosures required under ERISA, if good faith efforts are made to provide the documents as soon as administratively practicable.

Relief Period

Links and Resources Departments’ final rule on the extension of timeframes DOL’s Disaster Relief Notice 2020-01COVID-19 FAQs for Participants and Beneficiaries from the DOL

The deadlines included in this Compliance Overview are extended by disregarding the period fromMarch 1, 2020, until 60 days after the announced end of the National Emergency (or such other date announced by the Departments). This is referred to as the “Outbreak Period” and cannot exceed one year. To the extent there are different end dates for different parts of the country, additional guidance is expected.

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Extended Participant Deadlines

The Departments issued a final rule to provide plan participants with additional time to comply with certain deadlines affecting COBRA continuation coverage, special enrollment periods, claims for benefits, appeals of denied claims and external review of certain claims. These deadlines are summarized below.

HIPAA Special Enrollment Time frames

To make health coverage more portable, the Health Insurance Portability and Accountability Act (HIPAA) requires group health plans to provide special enrollment opportunities outside of the plans’ regular enrollment periods in certain situations, provided enrollment is requested within 30 days of the occurrence (or within 60 days in the case of loss of, or eligibility for premium assistance under, Medicaid or CHIP coverage).

The final rule extends the 30-day period (or 60-day period, if applicable) to request special enrollment, as illustrated in the example below. For purposes of the example, the National Emergency ends on April 30, 2020, with the Outbreak Period ending June 29, 2020.

Special Enrollment Example Facts: Individual A is eligible for, but previously declined participation in, her employer-sponsored group health plan. On March 31, 2020, Individual A gave birth and would like to enroll herself and the child into her employer’s plan; however, open enrollment does not begin until Nov. 15. When may Individual A exercise her special enrollment rights? Conclusion: Disregarding the Outbreak Period, Individual A may exercise her special enrollment rights for herself and her child into her employer’s plan until 30 days after June 29, 2020, which is July 29, 2020, provided she pays the premiums for any period of coverage.

COBRA Time frames

The Consolidated Omnibus Budget Reconciliation Act (COBRA), prescribes time periods for electing coverage, paying premiums, and notifying the plan of certain qualifying events. The final rule extends the following COBRA timeframes:

The following examples illustrate the extensions for qualified beneficiaries to elect and make premium payments for COBRA coverage. For purposes of these examples, the National Emergency ends on April 30, 2020, with the Outbreak Period ending June 29, 2020.

COBRA Election Example Facts: Individual B works for Employer X and participates in X’s group health plan. Due to the National Emergency, Individual B, who has no other coverage, experiences a reduction of hours below the hours necessary to meet the group health plan’s eligibility requirements (a COBRA qualifying event). Individual B is provided a COBRA election notice on April 1, 2020. What is the deadline for Individual B to elect COBRA? Conclusion: Disregarding the Outbreak Period, the last day of Individual B’s COBRA election period is 60 days after June 29, 2020, which is August 28, 2020.

COBRA Premium Payment Examples Facts: On March 1, 2020, Individual C was receiving COBRA continuation coverage. More than 45 days had passed since she elected it. Monthly premium payments are due by the first of the month. The plan does not permit longer than the statutory 30-day grace period for making premium payments. Individual C made a timely February payment, but did not make the March payment or any subsequent payments during the Outbreak Period.

Additional Facts: As of July 1, Individual C has made no premium payments for March, April, May or June. Does Individual C lose COBRA coverage, and if so for which months? Conclusion: Because the Outbreak Period is disregarded, premium payments for all four months are due 30 days after June 29, 2020. Thus, as long as Individual C makes all of the premium payments by July 29, 2020, she is eligible to receive COBRA continuation coverage during March, April, May and June.

Additional Facts: By July 29, 2020, Individual C made a payment equal to only two months’ worth of premiums. For how long does Individual C have COBRA continuation coverage? Conclusion: Individual C is entitled to COBRA continuation coverage for March and April, the two months for which timely premium payments were made. She is not entitled to coverage for any month after that.

Claims Procedure Time frames

Group health plans covered by ERISA are required to establish and maintain reasonable procedures governing the determination and appeal of claims for benefits under the plan. The following claims procedure time frames are extended by the final rule:

The following example, related to claims for medical treatment under a group health plan, illustrates this extension. For purposes of the example, the National Emergency ends on April 30, 2020, with the Outbreak Period ending June 29, 2020.

Claims Deadline Example Facts: Individual C received medical treatment for a condition covered under his plan on March 1, 2020, but he did not submit a claim for the medical treatment until April 1, 2021. Under the plan, claims must be submitted within 365 days of the participant’s receipt of the medical treatment. Was Individual C’s claim timely? Conclusion: Yes. For purposes of determining the 365-day period applicable to Individual C’s claim, the Outbreak Period is disregarded. Therefore, Individual C’s last day to submit a claim is 365 days after June 29, 2020, which is June 29, 2021, so Individual D’s claim was timely.

External Review Process Time frames

Non-grandfathered group health plans are subject to additional standards for external review of benefit claim appeals. Standards for external review processes and time frames for submitting claims to the independent reviewer may vary depending on whether the group health plan uses a state or federal external review process. The following time frames are extended by the final rule:

Deadline Extension for ERISA Notices and Disclosures

In addition to the deadline relief above, the DOL issued Disaster Relief Notice 2020-01 to extend the time for plan officials to furnish benefit statements and other notices and disclosures required under ERISA, so that plan sponsors have additional time to meet their obligations during the COVID-19 outbreak.  

Accordingly, an employee benefit plan will not be in violation of ERISA for a failure to timely furnish a notice, disclosure, or document that must be furnished between March 1, 2020, and 60 days after the announced end of the COVID-19 National Emergency (provided this period does not exceed one year), if they act in good faith. This means the plan must furnish the documents as soon as administratively practicable under the circumstances.

Good faith acts include use of electronic means of communicating with plan participants who the plan sponsor reasonably believes have effective access to electronic means of communication, including email, text messages and continuous access websites.

Key notices and disclosures required to be furnished under ERISA include the following:

Summary Plan Description (SPD)

Summary of Material Modifications (SMM)

Summary of Benefits and Coverage (SBC)

Notice of Patient Protections

Disclosure of Grandfathered Status

Wellness Program Disclosure (HIPAA)

Employer CHIP Notice

Newborns’ and Mothers’ Health Act Notice

Women’s Health and Cancer Rights Act Notices

Note that this chart is not all-inclusive, and certain notice requirements may depend on a number of factors, including the type of benefits offered under the health plan.

Separate Form 5500 Relief Available

The deadline extension contained in Disaster Relief Notice 2020-01 does not apply to Forms 5500, as separate Form 5500 filing relief is provided by IRS Notice 2020-23. IRS Notice 2020-23 extends the Form 5500 filing deadline for ERISA-covered welfare plans that have an original or extended filing deadline on or after April 1, 2020, and before July 15, 2020. These plans have until July 15, 2020 to file their Forms 5500.

As the number of reported cases of the novel coronavirus (COVID-19) continues to rise, employers are increasingly confronted with the possibility of an outbreak in the workplace.

Employers are obligated to maintain a safe and healthy work environment for their employees, but are also subject to a number of legal requirements protecting workers. For example, employers must comply with the Occupational Safety and Health Act (OSH Act), Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA) and Worker Adjustment and Retraining Notification (WARN) Act in their approach to dealing with COVID-19.  

This Compliance Bulletin provides a summary of the compliance issues facing employers in this type of situation.

There are a number of steps that employers can take to address the impact of COVID-19 in the workplace. In addition to reviewing the compliance concerns outlined in this Compliance Bulletin, employers should:

·         Closely monitor the CDC, WHO and state and local public health department websites for information on the status of the coronavirus.  

·         Proactively educate their employees on what is known about the virus, including its transmission and prevention.

·         Establish a written communicable illness policy and response plan that covers communicable diseases readily transmitted in the workplace.

·         Consider measures that can help prevent the spread of illness, such as allowing employees flexible work options like working from home.

What is Coronavirus?

The 2019 novel coronavirus (“COVID-19” or “coronavirus”) is caused by a member of the coronavirus family that is a close cousin to the SARS and MERS viruses that have caused outbreaks in the past. Symptoms of COVID-19 include fever, runny nose, cough and trouble breathing. Most people develop only mild symptoms. But some, usually people with other medical complications, develop more severe symptoms, including pneumonia, which can be fatal. The incubation period for COVID-19 is from two to 14 days.

Initially detected in Wuhan, China in late 2019, the first case of COVID-19 in the United States was reported on January 21, 2020. Since then, the disease has spread to more than 50 people within the continental United States, with CDC officials warning of further outbreaks.

How is Coronavirus Spread?

The available information about how the virus that causes COVID-19 spreads is largely based on what is known about similar coronaviruses. COVID-19 is a new disease and there is more to learn about its transmission, the severity of illness it causes, and to what extent it may spread in the United States.

According to the CDC, the virus is thought to spread mainly from person to person, between people who are in close contact with one another (within about six feet) or through respiratory droplets produced when an infected person coughs or sneezes. These droplets can land in the mouths or noses of people who are nearby, or possibly be inhaled into the lungs.

It may also be possible for a person to contract COVID-19 by touching a surface or object that has been contaminated with the virus and then touching his or her own mouth, nose, or eyes, but this is not thought to be the main way the virus spreads.

People are thought to be most contagious when they are most symptomatic. Some spread might be possible before people show symptoms, and there have been reports of this occurring, but this is not thought to be the main way the virus spreads.

Disease Prevention in the Workplace

Whenever a communicable disease outbreak is possible, employers may need to take precautions to keep the disease from spreading through the workplace. It is recommended that employers establish a written policy and response plan that covers communicable diseases readily transmitted in the workplace.

Employers can require employees to stay home from work if they have signs or symptoms of a communicable disease that poses a credible threat of transmission in the workplace, or if they have traveled to high-risk geographic areas, such as those with widespread or sustained community transmission of the illness. When possible, employers can consider allowing employees to work remotely. Employers may require employees to provide medical documentation that they can return to work.

Employers can consider canceling business travel to affected geographic areas and may request that employees notify them if they are traveling to these areas for personal reasons. Employees who travel to China should be informed that they may be quarantined or otherwise required to stay away from work until they can provide medical documentation that they are free of symptoms.

There are several legal considerations that employers should keep in mind when implementing and administering a communicable illness policy. These considerations are addressed in the following sections.

Occupational Safety and Health Act of 1970

Under the federal Occupational Safety and Health Act of 1970 (the OSH Act), employers have a general duty to provide employees with safe workplace conditions that are “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” Workers also have the right to receive information and training about workplace hazards, and to exercise their rights as employees without retaliation.

There is no specific Occupational Safety and Health Administration (OSHA) standard covering COVID-19. However, some OSHA requirements may apply to preventing occupational exposure to COVID-19. In addition to the General Duty clause, OSHA’s Personal Protective Equipment (PPE) standards and Bloodborne Pathogens standard may apply to certain workplaces, such as those in the healthcare industry.

Employers should continue to monitor the development of COVID-19 and analyze whether employees could be at risk of exposure. It is also important for employers to consider what preventative measures they can take to maintain safety and protect their employees from potentially contracting COVID-19.

Also, OSHA requires many employers to record certain work-related injuries and illnesses on their OSHA Form 300 (OSHA Log of Work-Related Injuries and Illnesses). OSHA has determined that COVID-19 is a recordable illness when a worker is infected on the job. Establishments that are required to complete an OSHA 300 log should be sure to include all COVID-19 infections that are work related.

The Americans with Disabilities Act­­­

The Americans with Disabilities Act (“ADA”) protects applicants and employees from disability discrimination. It is relevant to COVID-19 because it prohibits employee disability-related inquiries or medical examinations unless:

·         They are job related and consistent with business necessity; or

·          The employer has a reasonable belief that the employee poses a direct threat to the health or safety of him-or herself or others (i.e., a significant risk of substantial harm even with reasonable accommodation).

According to the Equal Employment Opportunity Commission (EEOC), whether a particular outbreak rises to the level of a “direct threat” depends on the severity of the illness. Employers are expected to make their best efforts to obtain public health advice that is contemporaneous and appropriate for their location, and to make reasonable assessments of conditions in their workplace based on this information. On March 19, 2020, the EEOC updated its existing publication, titled Pandemic Preparedness in the Workplace and the ADA, to reflect that the COVID-19 pandemic currently meets the direct threat standard.This means that sending an employee home who displays symptoms of COVID-19 would not violate the ADA’s restrictions on disability-related actions.

Regardless of whether an employee has COVID-19 or its symptoms, the ADA requires that information about the employee’s medical condition or history, obtained through disability-related inquiries or medical examination, be collected and maintained on separate forms and in separate medical files and treated as a confidential medical record. Therefore, employers should refrain from announcing to employees that a coworker is at risk of or actually has COVID-19. Instead, employers should focus on educating employees on best practices for illness prevention.

Employers should also review the EEOC’s answers to frequently asked questions (FAQs) about COVID-19 and the ADA for additional information.

Employee Leave Requirements

If an employee, or an employee’s family member, contracts COVID-19, the employee may be entitled to time off from work under federal or state leave laws. For example, an employee who is experiencing a serious health condition or who requires time to care for a family member with such a condition may be entitled to take leave under the Family and Medical Leave Act (FMLA). An illness like COVID-19 may qualify as a serious health condition under the FMLA if it involves inpatient care or continuing treatment by a health care provider. Employees may also be entitled to FMLA leave when taking time off for medical examinations to determine whether a serious health condition exists.

Many states and localities also have employee leave laws that could apply in a situation where the employee or family member contracts COVID-19. Some of these laws require employees to be given paid time off, while other laws require unpaid leave. Employers should become familiar with the laws in their jurisdiction to ensure that they are compliant.

Some employees may wish to stay home from work out of fear of becoming ill. Whether employers must accommodate these requests will depend on whether there is evidence that the employee may be at risk of contracting the disease. A refusal to work may violate an employer’s attendance policy, but employers should consult with legal counsel prior to disciplining such an employee. However, if there is no reasonable basis to believe that the employee will be exposed to the illness at work, the employee may not have to be paid for any time that is missed.

Compensation and Benefits

If employees miss work due to COVID-19, whether they are compensated for their time off will depend on the circumstances. As noted above, employees may be entitled to paid time off under certain state laws if they (or a family member) contract the illness. In other cases, non-exempt employees generally do not have to be paid for time they are not working. Exempt employees must be paid if they work for part of a workweek, but do not have to be paid if they are off work for the entire week. Note that special rules may apply to union employees, depending on the terms of their collective bargaining agreement.

Employees may be entitled to workers’ compensation benefits if they contract the disease during the course of their employment. For example, employees in the healthcare industry may contract the disease from a patient who is ill. Whether an employee is eligible for other benefits, such as short-term disability benefits, will depend on the terms of the policy and the severity of the employee’s illness.

Layoff and Furloughs

As state and local governments continue imposing increasingly restrictive rules to help slow the spread of COVID-19, employers should be aware that the federal WARN Act may require them to provide written, advance notice of certain plant closings and mass layoffs. A WARN notice provides information about assistance available through the State Rapid Response Dislocated Worker Unit and allows transition time for affected workers to seek alternative jobs or enter skills training programs. In general, this requirement applies to businesses that: 

·         Have 100 or more full-time workers (not counting workers who have less than six months on the job and workers who work fewer than 20 hours per week) and plan to lay off at least 50 people at a single site of employment; or

·         Employs 100 or more workers who work at least a combined 4,000 hours per week, and is a private for-profit business, private non-profit organization, or quasi-public entity separately organized from regular government.

Under the law, covered businesses must provide a WARN Notice to affected employees at least 60 days in advance of a plant closing or mass layoff. However, employers may qualify for one of three exceptions to this rule. More information about the WARN Act is available in the DOL’s Employer’s Guide to Advance Notice of Closings and Layoffs.    

Employers should also become familiar with any state or local requirements related to plant closings or layoffs. For example, under a New Jersey law that goes into effect on July 1, 2020, certain employers in that state will be required to provide severance pay to laid-off employees.  

Finally, employers should be aware that employees who are laid off may be able to continue health coverage under federal COBRA rules or state continuation coverage laws.

Communicating with Employees

As part of their efforts to prevent the spread of COVID-19 in the workplace, employers should consider communicating information about the illness to employees. The CDC, WHO and OSHA have all created informational material on the virus and its symptoms, prevention and treatment that can be helpful for employees.