• What is the Department of Labor (DOL) relief that was published on April 28?

  For all plans subject to Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code, the relief allows additional time in which a group health plan sponsor or plan administrator should provide certain notices, disclosures, or other documents affecting COBRA continuation coverage, special enrollment periods, benefit claims, appeals of denied claims, and external review of certain claims. The deadline extension is through the "Outbreak Period".

• What is the "Outbreak Period"?

  The "Outbreak Period" is defined as the period beginning March 1, 2020 and ending 60 days after the date on which the federal government declares the COVID-19 national emergency has ended (which has yet to be determined and which may vary by state or geographic region) or another date announced by the DOL and Treasury in a future notice. The rule provides that the "Outbreak Period" may not be longer than one year.

• To whom do these extensions apply?

  The deadline extensions provided for in the relief applies to employee benefit plans, employers, participants, and beneficiaries subject to ERISA.

COBRA

• How will HealthEquity handle eligibility reporting during the “Outbreak Period”?

  HealthEquity will continue to report eligibility using the same methods and in the same manner as always. However, we will make a new supplemental report available upon request that contains individuals who have elected but not paid for coverage.

• How will HealthEquity treat member cancellations during the "Outbreak Period"?

  HealthEquity will make changes to our COBRA platforms that disable the automatic cancellations for "Failure to Pay" and "Failure to Elect" reasons during the "Outbreak Period". Additionally, any days within the "Outbreak Period" will be disregarded when calculating:

  • The 60-day election period for COBRA continuation;

  • The 60-day notification periods for dependent qualifying events or requests for Social Security disability determinations' for example, if an individual was within the 60-day period of either of those events, the countdown is paused during the "Outbreak Period" and resumes where it left off after the period ends

• What is the impact to COBRA elections?

  Any days within the "Outbreak Period" (starting March 1, 2020) are disregarded when calculating:

  • The 60-day election period for COBRA continuation;

  • The 60-day notification periods for dependent qualifying events or requests for Social Security disability determinations.

• What is the impact to COBRA payment deadlines?

  Any days within the "Outbreak Period" (starting March 1, 2020) are disregarded when calculating any deadlines for making COBRA premium payments. Generally, 45 days following the date of election or 30 days following the first of the month.

• What is the member experience if COBRA premiums are not made during the “Outbreak Period” (starting with payments due March 1, 2020)?

  • While the member cannot be denied from receiving treatment (the same as in any pending COBRA payment situation), the insurer is not obligated to issue a payment for that service until the premium payment is made.

  • Members may be expected to pay out of pocket and file for reimbursement once the premium payment is made or the insurer can pay the claim and then request reimbursement from the member or the provider if the claim is paid and the member cancels for nonpayment.

• What is the impact to members with deadlines prior to the “Outbreak Period”?

  Any deadlines ending prior to March 1, 2020 are not affected by this guidance. For example, the following deadline expirations would remain in place:

  • Cancellations for non-payment of a premium that was due January 31, 2020;

  • COBRA elections that had to be made on or before February 29, 2020 and were not made on time.

• Are any COBRA members with deadlines during the "Outbreak Period" excluded by this relief?

  The guidance does not specify that qualified beneficiaries not impacted by COVID-19 (e.g., divorce or legal separation, loss of dependent child status) should be excluded from these deadline extensions.

• How will HealthEquity notify members of the relief provided by the DOL?

  HealthEquity will notify individuals of the relief through an insert with the COBRA Qualified Election Notification (QEN), Insufficient Payment Notice or Premium Notice. We've also created a member microsite with information on the DOL ruling and any additional updates that may occur. For an additional fee, HealthEquity can offer custom notifications of reinstatement rights upon request.

• How will HealthEquity reinstate members if they have already been cancelled during the "Outbreak Period"?

  HealthEquity has made the decision not to actively reinstate the Members but will do so upon the request of the Member/Client/Partner.

• COBRA Open Enrollment (OE) Impacts to you, the Employer:

  Due to the cancellation process being turned off for failure to elect and failure to pay, there will be:

  • Higher count of pending elections

  • Higher count of active COBRA participants

• Will the dependents added during Open Enrollment be eligible for these timeframes and deadline date extensions?

  Dependents added to COBRA coverage during Open Enrollment will receive the same payment deadline extensions as qualified beneficiaries (QBs). However, such dependents would not be QBs for purposes of eligibility for Social Security disability or multiple qualifying event extension deadlines irrespective of the DOL relief.

• Will new plans added during Open Enrollment be eligible for the extension?

  The guidelines don’t exclude plans added during OE so they should be eligible. OE should go through the normal business as usual process. The extension considers any premium due for any existing, added, or changed plans.

• Will Open Enrollment Notices be processed if Election Forms are not received?

  No, we will send written notification that there is no COBRA election on file. The participant will be required to make a COBRA election before any OE for subsequent plan years can be processed. Also, members should be advised that both an election of COBRA coverage for the current plan year and payment of all prior coverage periods must be made before coverage will be effective with the insurer(s) for the subsequent plan year. In other words, a QB still in the original COBRA election period cannot effectively have continuation coverage applied prospectively by submitting a completed OE form alone.

  • Example: Irene’s employment terminated on March 31, 2020. She and her spouse are covered by her Employer Alpha’s group health plan (Medical PPO) immediately before her termination of employment. They are furnished a COBRA Election Notice on April 15, 2020. Because of the Final Rule tolling election and payment deadlines falling within the Outbreak Period (effective March 1, 2020 and ending 60 days following the end of the National Emergency Period), their 60-day election period will not commence until the end of the Outbreak Period. Alpha’s OE period for the plan year beginning January 1, 2021 starts November 1, 2020 and ends November 30, 2020. Before we can process her OE, Irene would need to submit a timely COBRA election notice for continuation coverage effective April 1, 2020. She would not be allowed to begin her COBRA coverage effective January 1, 2021 without first electing and ultimately remitting premiums for the April 1, 2020 through December 31, 2020 coverage periods.

• What if I only want to offer Open Enrollment to the Active COBRA population and not the Election Pending population?

  Remember the IRS COBRA regulations require that each QB be provided OE rights to the same extent as similarly situated active employees.

  Furthermore, an individual with COBRA election rights is a QB during his or her COBRA election period.

  • The term “qualified beneficiary” (QB) means, with respect to a covered employee under a group health plan, any other individual who, on the day before the qualifying event for that employee, is a beneficiary under the plan—
    (i) as the spouse of the covered employee, or
    (ii) as the dependent child of the employee.
    [ERISA § 607(3)(A)]

  • A qualified beneficiary who does not elect COBRA continuation coverage in connection with a qualifying event ceases to be a qualified beneficiary at the end of the election period.
    [Treas. Reg. § 54.4980B-3, Q&A-1(f)]

  Their status as QBs during their COBRA election period allows that plans must provide these individual’s OE rights, too.

  • Example – Open Enrollment Occurring During a COBRA Election Period: Harry’s employment terminates on November 30. He and his spouse are covered by his Employer Bravo’s group health plan (Medical PPO) immediately before his termination of employment. They are furnished a COBRA Election Notice on December 15 (their 60-day COBRA election period would end February 13). Bravo’s open enrollment period for the plan year beginning March 1 starts January 1 and ends January 31, during which time similarly situated active employees can choose coverage under Bravo’s Medical PPO or Medical HMO components. As Harry and his spouse are QBs throughout their COBRA election period, Bravo should offer them OE materials affording them the right to change their coverage to the Medical HMO effective March 1 (provided they also elect COBRA coverage under the Medical PPO effective December 1 and pay the required premiums for the December through February coverage periods).

  • Example – Open Enrollment Occurring Before a COBRA Election Period: Assume the same facts as in the previous example, except that Harry’s employment terminates on February 28 (after the close of Bravo’s OE period). During their OE period while Harry was still an active employee, he and his spouse selected enrollment in Bravo’s Medical HMO component effective March 1. However, their coverage immediately before the QE was in Bravo’s Medical PPO component. While the regulations do not consider this scenario, it stands to reason that - since neither Harry nor his spouse were QBs during Bravo’s OE period preceding his termination – there are no obligations to essentially re-offer OE rights to them once they become QBs and can simply offer them the coverage in force immediately before the Qualifying Event (QE). On the other hand, COBRA does require that COBRA coverage provided to QBs be identical to coverage provided to similarly situated active employees. Since an active employee who changed coverage during Bravo’s OE period would obviously be entitled to this new coverage effective March 1, it can be argued that this coverage should similarly be offered to QBs. For administrative ease, Bravo could simply opt to process Harry’s and his spouse’s election of coverage under the Medical HMO as of March 1.

  Should you, the Employer, still decide that you do not want to notify the pending population, we can do so at your direction. You will need to provide this in writing to your Client Service team.

• What if I only want to offer Open Enrollment to the Active COBRA population who are not included in the failure to pay or failure to elect exceptions?

  Should you, the Employer, not want to offer OE to those who were not cancelled for failure to pay or failure to elect, you would have to opt-out of the process that has disabled the members from being terminated. This would then allow the population to be terminated ahead of OE packages being sent out. However, please note that once you opt-out, we cannot ‘reinstate’ that population after the OE notices go out. Those people will remain terminated. If you wish to opt back in to not cancelling members, it will not include the member that termed for OE.

FSA & HRA

• What is the impact to claims for plans that are subject to ERISA (e.g., FSA/HRA)?

  Any days within the "Outbreak Period" (starting March 1, 2020) are disregarded when calculating any of the following FSA/HRA plan periods:

  • Deadlines to submit claims subject to applicable claims procedures;

  • Deadlines to file appeals of adverse benefit determinations;

  • Deadlines to file external requests for review of adverse benefit determinations.

• What action should I take if I have an active FSA or HRA plan that is impacted?

  You may wish to tell your employees about the changes in the runout deadline for FSA and HRA. For FSA and HRA plans with a claim runout end date on or after March 1, 2020, HealthEquity will automatically apply an extension through December 31, 2020^* in the member portals with a disclaimer that the date is subject to change based on federal guidance.

  ^*All employer sponsored plans (ESPs) and DCFSA plans will be excluded from the automated runout extension update. Any changes to ESP or DCFSA plan runout dates can by managed through your HealthEquity contact.

• Will HealthEquity continue to process claims during the emergency period?

  Claims will continue to be processed in a timely fashion and prefunding will be required for claims paid in accordance with your normal funding schedule.

  Deadline extensions for all claims that are filed and received during the emergency period will be supported. Telemedicine claims under HSA-qualified high-deductible health plans (HDHPs) will be supported based on new guidance provided by the IRS.

• What about prefunding?

  If prefunding for the prior plan year has already been returned to you, HealthEquity will not request the prefund be returned. Instead, we will send an invoice to you in the event we need to pay additional claims during the extended runout period.

• How will deadline adjustments be communicated to my employees?

  HealthEquity will update the member website with a message displaying the claim-by date and a disclaimer that the date is subject to change based on federal guidance.

  Once the national emergency period is declared over, HealthEquity will adjust the runout dates according to guidance rules and communicate this to you via a compliance alert.

• What about special enrollment dates?

  HealthEquity will support the extension of special enrollment dates (in the case of events like marriage, divorce, birth and adoption) via the standard enrollment method.

• What about carryover amounts that have already been transferred?

  Carryover amounts that have been transferred to the new plan year will not be automatically rolled back.

• What is the impact to Direct Bill/Retiree?

  • ERISA plans are subject to this guidance, which will include most retiree group health plans maintained by an employer.

  • However, not all Direct Bill plans for which we provide services are subject to ERISA.

  • In all instances, clients should consult ERISA legal counsel when determining how this relief applies to their benefit plan(s).

• What is the impact for State Continuation?

  • While small employer plans are subject to ERISA, the continuation requirements for such plans are generally not.

  • However, many states have issued guidance and similar proclamations to health plan insurers of those states affording similar deadline extensions.

  • In all instances, clients should consult ERISA legal counsel when determining how this relief applies to their benefit plan(s).

• What is the impact to Dependent Care FSA?

  Dependent Care FSAs are not subject to ERISA.

• What is the impact to Commuter?

  Commuter plans are not subject to ERISA.

• How will HealthEquity support this relief?

  A project team has been formed to determine the process and platform changes needed to support the relief. Additional information will continue to be provided.

Note: The FAQs above are provided to assist employers and plan sponsors with their research into the potential impacts of the recent IRS guidance. This is not legal advice, and the relief actions are complex and dynamic. As always, we strongly encourage employers and plan sponsors to consult their legal or benefits counsel for conclusive guidance on how the actions apply in their circumstances.