September 28, 2020

COBRA Election Notices and Other Deadlines Remain Extended

COBRA is a federal law that allows employees and their families to temporarily remain covered under an employer’s group health plan coverage following a “qualifying event”, such as disability or a termination of employment. COBRA is generally applicable to employers having 20 or more employees in a calendar year. An employer must provide notice of an employee’s right to elect continuing coverage within 14 days of a qualifying event. The employee must then elect coverage within 60 days and begin paying premiums within 45 days of the election.

The IRS and DOL have extended various COBRA deadlines within the “outbreak period” which is defined as “the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification.”

Deadlines extended by the joint guidance include:
  • 30 and 60-day special enrollment period;
  • 60-day notice of disability;
  • 14-day deadline to furnish COBRA election notice;
  • 60-day deadline for participants too elect COBRA;
  • 45 day initial and 30-day regular deadline for premium payments; and
  • 60-day period to obtain individual coverage on exchange.
Example:

Employee works for Employer and participates in Employer’s group health plan. Due to the COVID-19 emergency, Employee experiences a qualifying event for COBRA purposes as a result of a reduction of hours and has no other coverage. Employee is provided a COBRA election notice on September 1, 2020. What is the deadline for Employee to elect COBRA? The outbreak period is disregarded for purposes of determining Employee’s COBRA election period. If the COVID-19 national emergency ended on September 30, 2020, the last day of Employee’s COBRA election period is 60 days after November 29, 2020, or January 28, 2021.

Note:

The extensions provided by the IRS/DOL are made pursuant to ERISA Section 518. This Section allows a period of up to one year following a presidentially declared emergency to be disregarded for purposes of calculating deadlines under ERISA.

Employers with questions about the application of the COBRA deadlines in the outbreak period are encouraged to contact a member of the Kerr Russell Labor and Employment practice group.

Liam K. HealyLiam K. Healy of Kerr Russell practice clients maintain compliance with state and federal tax laws that govern individuals and businesses focuses his practice on helping clients maintain compliance with the myriad of state and federal tax laws and regulations that govern individuals and businesses. A particular focus of Liam’s practice is in the area of employee benefits and ERISA. Liam specializes in designing pension and executive compensation plans to benefit business owners and executives. His practice includes drafting and reviewing deferred compensation agreements, severance agreements and non-compete agreements, representing employers in multi-employer plan collection and withdrawal liability matters.

 

Mark C. KnothImage of Mark C. Knoth, Employment and Labor attorney of Kerr Russell chairs the firm’s Labor, Employment, Employee Benefits & ERISA Practice Group. He counsels and advises business owners, managers and human resources professionals on workplace issues. These include civil rights and anti-discrimination laws; employee discipline; wage and hour; overtime; employee leaves; reasonable accommodations; veterans issues; picketing; secondary boycotts; reductions in force; drug testing; unemployment compensation; affirmative action; and union organizing campaigns, among other matters. He additionally drafts employee policies, handbooks, contracts, and covenants not to compete, and investigates threats of violence, allegations of harassment, and other employee misconduct.

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