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Do I Need to Adjust My COBRA Process Due to COVID-19?

HR Question:

I’ve seen several changes in employee benefits and programs as a result of the pandemic. Do I need to adjust my COBRA process due to COVID-19?

HR Answer:

Yes, due to COVID-19, there have been many changes to group health plans, pension plans, and other welfare plans, such as COBRA, FMLA, and more. As businesses and leaders have scrambled to meet the fluctuating needs of this time, many of our federal agencies have done the same.

Specifically, as it relates to COBRA, the Department of Labor and the Internal Revenue Service have published information and updates on COBRA deadlines during the pandemic, providing relief to those impacted by the virus.

As you may know, the Consolidated Omnibus Budget Reconciliation Act (COBRA) is a program that provides for the continuation of group health coverage for some employees and their families when they experience a job loss or reduction of hours. Your normal, already established COBRA processes may be altered or adjusted as new and unique situations continue to crop up as a result of COVID-19. Not only will your processes adjust, but the way that you communicate these benefits and processes will as well.

The revisions outlined in the released statement requires group health plans, disability and other welfare plans, and employee pension benefit plans to extend their timelines by a period of time they designate as the “Outbreak Period”.  The Outbreak Period is from March 1, 2020 until 60 days after the end of the declared National Emergency.  The ending date, obviously, is an unknown date at this time.  Simply stated, employers must exclude the time during the Outbreak Period when determining deadlines for COBRA.  This would include deadlines for notification as well as election.

As an example, COBRA elections must be typically made within 60 days of the notice.  Under this extension, the Outbreak Period is ignored so if the qualifying event occurs during the Outbreak Period, the election period deadline will extend to 60 days after the end of the Outbreak Period.  What does that mean?  Someone you sent a notice to last week will have 60 days after the end of the Outbreak Period (unknown at this time) to elect coverage.

Another pertinent example is with COBRA Payments.  Typically COBRA provides a 45-day premium period with a 30-day grace period.  Under this extension, the Outbreak Period is ignored in determining the deadline for premium payments under COBRA.  It is noted that claims do not have to be paid during this non-payment time, but they must be paid immediately upon resumption of the benefits after the premium is paid.

Other areas of COBRA that are impacted by these adjustments include:

  • HIPAA Special Enrollment Rights
  • Employee Notice of a Qualifying Event or of Disability
  • Deadline for Participants to Make an Initial Claim
  • Deadline for Appeal of a Denied Claim
  • Interim Claims Procedures Deadlines

Additional details on all of these items can be found on the Federal Register.

As an HR professional, keep in mind these extension periods and review deadlines before terminating coverages or not allowing enrollment due to deadline considerations.  Better to be safe during this time of change!

strategic HR inc. has the answers to all of your tough Benefits and Compensation-related questions, particularly when addressing the new challenges that COVID-19 has presented. Please visit our Benefits & Compensation page for more information or our Employer’s Resource Guide to Coronavirus for more resources.