Employers should be aware of recent changes to deadlines and relief for employee benefit plans, participants and beneficiaries due to the COVID-19 pandemic. The Employee Benefits Security Administration of the Department of Labor and Internal Revenue Service (collectively, the Agencies) recently issued guidance to (a) further explain relief included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and (b) extend certain deadlines applicable to benefit plans. The guidance is included in three documents:
Below is a summary of the guidance.
Extension of Certain Timeframes under the Final Rule
Under Section 518 of ERISA, the Secretary of Labor has the authority to delay deadlines due to a Presidential-declared disaster. In March, President Donald Trump issued the Proclamation on Declaring a National Emergency concerning the Novel Coronavirus Disease Outbreak and by separate letter determined that a national emergency exists nationwide beginning March 1 (the COVID-19 Emergency). As a result of the COVID-19 Emergency, the Agencies have indefinitely extended the following deadlines:
Deadlines Regarding Participants and Beneficiaries
Deadlines Regarding Group Health Plans
No deadline will be imposed during the period from March 1 through 60 days after the COVID-19 Emergency is formally ended. Plan sponsors and administrators must be prepared to adjust their administration to reflect that this period will be disregarded entirely in calculating deadlines. The Agencies are monitoring the effects of the COVID-19 Emergency and may provide additional relief as warranted.
Relief for Employee Benefit Plans
The Notice provides the following additional relief to employee benefit plans, which includes:
Additionally, the Notice includes general fiduciary guidance. According to the Notice, “[p]lan fiduciaries should make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments” and “minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.”
Guidance for Participants and Beneficiaries
The DOL issued several frequently asked questions regarding health and retirement benefits. These FAQs address several issues, such as special enrollment rights, COBRA rights, health coverage options, retirement plan distributions and defined contribution plan quarterly benefit statements. They are intended to assist participants and beneficiaries who are having difficulty with their benefits. Plan sponsors and administrators should review these FAQs on the DOL website to ensure that they are providing participants and beneficiaries with adequate information.
Please contact Karleen Green, Michael Williams and Seale Pylate or Phelps’ Employee Benefits team if you have any questions or need compliance advice and guidance. For more information related to COVID-19, please also see Phelps’ COVID-19: Client Resource Portal.