COBRA and EBSA Disaster Relief Notice 2021-01
Published on March 3rd, 2021
Last week Employee Benefits Security Administration (EBSA) released guidance around the pause on COBRA deadlines for election and payment requirements, as well as other benefit deadlines. Under previous guidance the pause was scheduled to end February 28, 2021 – one year from the March 1, 2020 implementation date. The initial rule extended the deadline to elect or pay for coverage to be 60 days after the end of the disaster period. Secondarily, that rule was amended to provide relief for one year after the start of the emergency period, plus 60 days – which would have been February 28. In a rush to address the impending date, EBSA guidance outlined additional detail that, more than anything else, may have served to confuse or complicate the situation.
Understanding the EBSA guidance
Disaster Relief Notice 2021-01 has amended both previous rules to read that the earlier of the following would apply:
- The relief will end one year from the date the deadline would have occurred after March 1, 2020, or
- 60 days after the end of the national emergency.
- All extensions must be measured on a person-by-person basis.
What does this mean for COBRA administrators?
Interpretation of this rule creates certain challenges for administrators:
- Each eligible individual will have a specific one-year deadline – particularly those whose one-year pause began AFTER March 1, 2020.
- Individuals should be notified of their specific dates and deadlines
- Administrative systems should be modified to manage custom COBRA, special enrollment, claims, payments and other deadlines
One particular law firm engaged in benefits law interpreted the extension as being individual and read the language as only applicable to the employee and not any family members. This interpretation has been widely rejected.
There is no language on retroactive COBRA payments, subsidies or other coverage allowances included in the Notice. We hope guidance on subsidies is being considered as part of either the Stimulus Bill or Education Bill currently being considered by Congress.
Employers and administrators should work with legal counsel and administrators to design your approach to this new change. Alegeus is prepared to support and discuss administrative steps and the guidance interpretation with our clients. Our COBRA expertise can provide software solutions to meet the nuanced requirements of this individual extension.
About the author
Solution Engineer, Consumer Solutions
Kris Saunders has worked in the COBRA space for more than 30 years, including a role as vice president of operations for WageWorks during ten of those years. She currently works in consumer solutions for Alegeus. Kris is certified as a CFCI, CAS and SPHR.