Group Health Plans and COBRA Deadlines Extended During COVID-19 Pandemic
COVID Pandemic Has Jeopardized Health Care Coverage for Millions
Many businesses have been forced to lay off workers in response to the economic slowdown caused by the COVID-19 pandemic. These layoffs, in addition to impacting household incomes, also affects families’ access to important employee benefits, including health insurance coverage. Prior to the pandemic, more than half of all Americans received health insurance from an employer. Now, with rising unemployment rates, millions of Americans’ health insurance coverage is in jeopardy.
Employment Laws Help Workers Maintain Insurance
Since a national emergency was declared on March 13, 2020, there have been numerous employment law changes to help protect workers impacted by the pandemic. Important to individuals facing the potential loss of their employer-sponsored health insurance coverage are the changes enacted by the Internal Revenue Services and the Employee Benefits Security Administration on May 4, 2020.
Many of these changes suspend important deadlines until after the “Outbreak Period,” which is defined as March 1, 2020 to 60 days after the end of COVID-19 national emergency (or until such other date the DOL and IRS decide upon).* These changes, and their impact on individuals’ access to health insurance, are discussed below.
COBRA Deadlines Extended
COBRA, passed in 1985, gives employees the ability to continue health insurance coverage after a qualifying event, such as the termination of employment or a reduction of work hours. As such, COBRA’s importance during this pandemic cannot be overstated. Recent changes to this law provide added protection to employees whose jobs have been impacted by COVID-19.
1. Extension of COBRA Election
Normally, COBRA requires employees who have lost health insurance coverage due to a qualifying event (e.g., termination of employment or reduction of hours) to elect COBRA coverage within 60 days of receiving a COBRA election notice. However, under the new rule, the 60-day timeframe does not begin until the end of the Outbreak Period.
For example, if the COVID-19 national emergency ends on April 30, 2021, the Outbreak Period would end on June 29, 2021. In this example, an employee who lost health insurance coverage during the Outbreak Period would have until August 28, 2021 (60 days from June 29, 2021) to elect COBRA coverage.
2. Extension of COBRA Premium Deadlines
Normally, individuals must pay their first COBRA premium within 45 days of electing COBRA coverage, and pay subsequent COBRA premiums within a 30-day grace period that starts at the beginning of each coverage month. The new rule extends these deadlines by disregarding the Outbreak Period when calculating the premium due date.
For example, if an individual elected COBRA coverage on June 1, 2020, her initial COBRA premium would normally be due 45 days later on July 16, 2020. However, under the new rules, her initial COBRA premium will not be due until 45 days after the Outbreak Period.
As another example, if an individual was receiving COBRA continuation coverage when the national emergency began, but failed to pay his COBRA premiums for June 2020, July 2020, and August 2020, these premiums will nonetheless be deemed timely if he pays these premiums within 30 days after the Outbreak Period.
Extended Enrollment Deadlines for Group Health Plans
The new rule also impacts an employee’s ability to enroll in their employer’s group health plans. Typically, employees may only enroll in such plans during the plan’s annual enrollment period or if the employee qualifies for a special enrollment period. An employee qualifies for a special enrollment period upon the occurrence of certain “life events,” such as marriage or the birth of a child.
Normally, the employee has 30 days following the occurrence of a “life event” to enroll in the group health plan. This would mean if an individual gave birth on November 6, 2019, she would have until December 6, 2019 to enroll the new baby in her employer’s group health plan.
Under the new rule, the 30-day timeframe does not begin until the end of the Outbreak Period. This means if an employee gives birth to a baby on October 9, 2020, she will have until 30 days after the end of the Outbreak Period to enroll her new baby in her employer’s group health plan.
Do you have questions regarding the COVID-19 pandemic’s impact on your health insurance? Contact one of our experienced employee benefits attorneys for a virtual consultation to discuss your case. Please call a Madison employee benefits attorney directly at (608) 257-0040 or a Milwaukee employee benefits attorney at (414) 271-8650, or email us via our Contact Page.
* The end of the COVID-19 emergency has not been determined at the time of publishing this article.