RELIEF FOR COBRA PARTICIPANTS

RELIEF FOR COBRA PARTICIPANTS COULD MEAN MORE INDIVIDUALS ARE ELIGIBLE FOR OPEN ENROLLMENT

Guidance issued by the Departments of Labor (DOL) and the Treasury in April 3rd grants significant relief for individuals enrolled in COBRA coverage. Notably, it extends certain deadlines for plan participants, including the dates by which they must pay coverage premiums.

Under the guidance, COBRA premium payment deadlines must be disregarded during the “Outbreak Period,” defined as March 1, 2020 to 60 days after the declared end of the national emergency related to COVID-19 (which has yet to be announced). After the Outbreak Period ends, participants must remit payment, or they will be retroactively terminated to the last date they paid for coverage.

This means employers may have COBRA plan participants who have not remitted premium payments but may still be considered qualified beneficiaries to whom open enrollment rights may still apply.

Individuals who are eligible for COBRA but have not yet elected coverage will need to do so before they participate in an open enrollment scenario.

It’s important to note that DOL relief itself makes no reference to open enrollment periods, nor do COBRA regulations require that open enrollment periods for COBRA qualified beneficiaries run concurrent with active employee open enrollment periods.
Nevertheless, organizations may want to facilitate open enrollment for COBRA participants at the same time – regardless of payment status.

Organizations will need to carefully examine their open enrollment population, take account of their COBRA participants and consider various use cases affected by this guidance. This may create some communication challenges, as organizations work to ensure open enrollment materials are sent to all qualified individuals.

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Status

Mandatory for ERISA plans;
encouraged for non-ERISA plans

Source

April relief from the DOL and IRS

Effective timeline

March 1, 2020 to 60 days after
the declared end of the COVID-19
national emergency (which has
yet to be announced)

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