COBRA, FSA, HRA Extension Deadlines; Updated Notices for COBRA Continuation of Coverage

ConnectYourCare continues to work toward answers during these challenging and uncertain times for our readership—spanning clients, participants, brokers, partners, and even our own employees and local communities. And with this article, we’d like to shed further light on the latest developments around Disaster Relief Notice 2020-01, including how it specifically impacts the already complex topic of COBRA administration.

The relief notice—recently issued by the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) and the Internal Revenue Service (IRS)—extends the time for plan officials to furnish benefit statements, annual funding notices, and other notices and disclosures required by ERISA.

In simpler terms, it provides both participants and plan administrators extra time to comply with certain deadlines related to COBRA, Health Care Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs).

For participants: The changes that may impact COBRA include an extension of the deadlines to:

For plan administrators: The rule also extends deadlines to provide COBRA election notices, benefit statements, and other notices and disclosures required by ERISA, “if the plan sponsor acts in good faith and provides any required notice disclosure or other document as soon as administratively practicable.”

For participants: Changes that may impact FSAs and HRAs include extension of the deadline:

For plan administrators: Should you provide a plan with a run-out period ended after March 1, 2020, you may be required to extend a participant’s ability to submit FSA or HRA claims until 60 days after the end of the COVID-19 national emergency is declared over.

Click here to learn about the rule in full.

For frequently asked questions around this relief notice and other DOL notices as they specifically apply to COVID-19, click here.

The DOL also recently announced the availability of two new COBRA model notices with the intention of providing further guidance “to ensure that qualified beneficiaries better understand the interactions between Medicare and COBRA.”

The updated model notices expand upon traditional COBRA coverage eligibility to offer more insight into potentially complicated scenarios where both Medicare and COBRA come into play—including which coverage is paid out first, should a participant be enrolled in both programs, and the ability for a participant who loses their job to enroll in Medicare after their group plan coverage ends. (In this scenario, the individual didn’t enroll in Medicare upon eligibility because they were still employed.)

For this later scenario, the DOL clarifies that there is an eight-month “special enrollment period” for an individual to sign up for Medicare Part A or B, beginning on the earlier of:

In a set of frequently asked questions compiled to highlight the model notice updates, the DOL emphasizes certain Medicare advantages and goes into further detail on health coverage alternatives to COBRA continuation coverage, where individuals may potentially be eligible for a premium tax credit and/or options for lower out-of-pocket costs around deductibles, coinsurance, and copayments.