The Employee Retirement Income Security Act of 1974 (“ERISA”) is a federal law that protects an individual’s rights to benefits under employee benefit plans. Passed in 1974, ERISA has been amended to expand the protections available to covered individuals. Notable amendments include, but are not limited to, the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Health Insurance Portability and Accountability Act (“HIPAA”), and the Affordable Care Act.
In addition to the foregoing amendments, President Donald Trump’s declaration of a national emergency related to COVID-19 and signing of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) resulted in the temporary amendment of various aspects of ERISA. In accordance with these actions, on May 4, 2020, the United States Department of Labor (“DOL”) issued a notification regarding relief and extension of timeframes under ERISA. Included in this notice were specific examples relating to each type of extension permitted. Although informative, these examples are not an exhaustive list of applicable scenarios, but provide insight into several of the ERISA time period extensions now permitted.
Example 1: Electing COBRA
Individual A works for Employer X and participates in Employer X’s group health plan. As a result of COVID-19, Individual A experiences a qualifying event for COBRA purposes due to a reduction in hours that caused Individual A to fall below the hours necessary to meet the group health plan’s eligibility requirements. Individual A has no other coverage. On April 1, 2020, Individual A is provided a COBRA election notice and is eligible to elect COBRA coverage under Employer X’s plan. The period of March 1, 2020, until sixty (60) days after the end of the national emergency or such other date announced by the DOL (“Outbreak Period”), is not included in the time period calculation. Therefore, the last day of Individual A’s COBRA election period is sixty (60) days after June 29, 2020, which is August 28, 2020.
Example 2: Special Enrollment Period
Individual B is eligible for, but previously declined participation in, her employer-sponsored group health plan. On March 31, 2020, Individual B gave birth and would like to enroll herself and the child into the employer’s plan. However, open enrollment does not begin until November 15, 2020. The Outbreak Period is not included in the time period calculation, thus Individual B and her child qualify for special enrollment into her employer’s plan as early as the date of the child’s birth. Individual B may exercise her special enrollment rights for herself and her child until thirty (30) days after June 29, 2020, which is July 29, 2020. However, she must pay the premiums for any period of coverage.
Example 3: COBRA Premium Payments
On March 1, 2020, Individual C was receiving COBRA continuation coverage under a group health plan. More than forty-five (45) days had passed since Individual C elected COBRA. Monthly premium payments are due by the first of the month. The plan does not permit qualified beneficiaries longer than the statutory thirty (30) day 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. As of July 1, 2020, Individual C has not made premium payments for March, April, May, or June.
However, when calculating whether monthly COBRA premium installment payments are timely, the Outbreak Period is not included, thus premium payments made within thirty (30) days after June 29, 2020, for March, April, May, and June 2020, are timely. As such, Individual C is entitled to COBRA continuation coverage for these months if she timely makes her payments. Payments for March, April, May, and June are all deemed to be timely if they are made within thirty (30) days after the end of the Outbreak Period, by July 29, 2020. However, premium payments for those four (4) months (i.e., March, April, May, and June) are all due by the July 29, 2020 deadline. Individual C is eligible to receive coverage under the terms of the plan during this interim period even though some or all of the premium payments may not be received until July 29, 2020. As the due dates for Individual C’s premiums would be postponed and payment for premiums would be retroactive during the initial COBRA election period, Individual C’s insurer or plan may not deny coverage, and may make retroactive payments for benefits and services received by the participant during this time.
Example 4: COBRA Premium Payments
In this example, using the same facts under Example 3, by July 29, 2020, Individual C made a payment equal to two (2) months’ premiums. Therefore, Individual C is entitled to COBRA continuation coverage for March and April 2020, which are the two (2) months for which timely premium payments were made. However, Individual C is not entitled to COBRA continuation coverage for any month after April 2020. Benefits and services provided by the group health plan that occurred on or before April 30, 2020, would be covered under the plan. The plan would not be obligated to cover benefits or services that occurred after April 2020.
If you feel your rights under ERISA or the CARES Act have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you!