On April 29, the U.S. Department of Labor (DOL) released three pieces of guidance to help employee benefit plan participants and beneficiaries, plan sponsors and fiduciaries, and plan service providers navigate the administrative and compliance challenges resulting from the COVID-19 pandemic.
1. Final Rule Extends Key Time Frames Affecting Plan Administration
The DOL, together with the Department of the Treasury and the Internal Revenue Service (the Agencies), issued a final rule mandating that the period beginning March 1 (the date the COVID-19 National Emergency was declared) and ending 60 days after the announced end of the National Emergency or such other date announced by the Agencies (the Outbreak Period) be disregarded for purposes of calculating certain time frames applicable to the administration of employee benefit plans. In other words, the applicable time frame would apply at the end of the Outbreak Period, as illustrated by the following example:
While the final rule emphasizes the time frames applicable to group health plan coverage (e.g., the periods for electing and maintaining COBRA continuation coverage), it also addresses the time frames for submitting benefit claims and appealing adverse benefit determinations. As such, the final rule applies not only to group health plans, but also to all other ERISA welfare benefit and pension benefit plans. Accordingly, plan sponsors and service providers should update their processes for tracking the applicable time frames to disregard the Outbreak Period.
The final rule notes that there may be different Outbreak Period end dates for different parts of the country, which will be addressed in subsequent guidance. Therefore, plan sponsors and service providers with operations in multiple locations across the United States will need to track future announcements regarding regional Outbreak Period end dates and further revise their processes accordingly.
2. DOL Notice Extends Disclosure Periods and Provides Additional Compliance Guidance
Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2020-01 (the Notice) addresses a variety of topics of particular interest to plan sponsors and fiduciaries. Among the most significant are the following:
Other compliance issues addressed in the Notice relate to the timing for distribution of blackout notices, Form 5500 filing relief and other general fiduciary compliance guidance (i.e., if the plans act prudently, reasonably and in the interest of covered workers and their families, the DOL's enforcement actions will emphasize compliance assistance, grace periods and other appropriate relief).
3. FAQs
Finally, the DOL issued a series of frequently asked questions (FAQs) to help all affected by the COVID-19 pandemic understand their rights and responsibilities under their health benefit and retirement benefit plans. Plan sponsors and service providers should review the FAQs to ensure that the procedures they have put in place align with the expectations of the DOL.
If you have any questions regarding the above or any other employee benefits matters, please reach out to any of the attorneys in Day Pitney's Employee Benefits and Executive Compensation group.
For more Day Pitney alerts and articles related to the impact of COVID-19, as well as information from other reliable sources, please visit our COVID-19 Resource Center.
COVID-19 DISCLAIMER: As you are aware, as a result of the COVID-19 pandemic, things are changing quickly and the effect, enforceability and interpretation of laws may be affected by future events. The material set forth in this document is not an unequivocal statement of law, but instead represents our best interpretation of where things stand as of the date of first publication. We have not attempted to address the potential impacts of all local, state and federal orders that may have been issued in response to the COVID-19 pandemic.
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