In the past couple of weeks, there has been additional guidance and relief due to COVID-19 that impacts both pre-tax plans and COBRA.

Many Benefit Plan Deadlines Must Be Extended

On April 28th, 2020, the DOL and IRS announced extended deadlines beginning on or after March 1st, 2020 for plans subject to ERISA. See the notice in Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2020-01.  The notice extends many deadlines to 60 days after the end of the ‘Outbreak Period.’ The Outbreak Period ends when the President declares an end to the COVID-19 National Emergency. For example, if the national emergency ends on June 30th, these deadlines will be August 29th, 2020.  As of today, the end date is unknown. 

Following are some of the key deadlines impacted by the notice:

What This Means for Your Plan

Note the Following Regarding Governmental Plans:  Unless your plan follows ERISA rules, you are not impacted.  However, HHS is encouraging sponsors of governmental plans to adopt all deadline extensions. Furthermore, they have let the DOL and IRS know that it ‘will exercise enforcement discretion to adopt a temporary policy of measured enforcement to extend similar deadlines applicable to governmental group health plans and their participants under the appropriate provision of the Public Health Service Act (PHSA).’  This means that if you are a governmental employer, it is a good idea to adopt the extensions now.

Optional Provisions

On May 12th, 2020, the IRS released two additional notices (Notice 2020-29 and Notice 2020-33) to provide relief for cafeteria plans, health savings accounts (HSAs), flexible spending accounts FSA) and health reimbursement arrangement (HRAs).  Note that these provisions are optional, and as the employer and plan sponsor, you may choose to adopt all, some, or none of these exceptions.

Following are the three key provisions impacted by these notices:

1.  Temporary Relief to the Status Change Rules:

The following rules are effective through the end of the 2020 calendar year and must be applied on a prospective basis:

2.  Extended Grace Periods for the Health Care, Limited Purpose & Dependent Care FSA:

This provision applies to any calendar year plans that had a Grace Period for the 2019 plan year that expired or for mid-year plan years (fiscal plan years) that have a plan year that ends in 2020. 

3.  Additional Carryover Amount:

If you offer the carryover feature of up to $500, the IRS has changed the maximum allowable amount to $550 for plan years starting in 2020.  For calendar year plans, the additional $50 will be carried over into 2021.

Additional Relief for Health Savings

Notice 2020-29 provides relief for the following prior changes regarding HSA eligibility, and High Deductible Health Plans retroactive to January 1st, 2020:

EBSA DISASTER RELIEF NOTICE 2020-01: COBRA UPDATES

EBSA Disaster Relief Notice 2020-01 announced that the deadlines for providing the COBRA Election Notice, the COBRA Election Period, and the Payment of COBRA Premiums have all been extended.  In addition, the deadline for notifying the Plan Administrator of a COBRA Qualifying Event or Disability Determination is extended.

Note: The extensions only apply to Federal COBRA

The extensions apply to events that may have occurred on or after March 1st, 2020, and will continue until 60 days after the date the National Emergency, declared by President Donald Trump, is officially declared as over. At the time this article was published, this date was still to be determined.

Specific grace periods affected are:

For more information including frequently asked questions, you may visit the Department of Labor website

In addition to continuation coverage, other health coverage options may be available, such as coverage through the Health Insurance Marketplace at www.healthcare.gov or (800) 318 – 2596.