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ERISA and the End of the COVID-19 National Emergency – What Happens After July 10, 2023

Businessman looking at news report about ERISA and the end of Covid emergency

Background – COVID National Emergency and Agency Guidance 

On March 13, 2020, President Donald Trump signed the Proclamation declaring the National Emergency effective March 1, 2020. In Spring 2020 and 2021, the Department of Labor (“DOL”), the Department of Treasury (“Treasury”), and the Internal Revenue Service (“IRS”) published guidance extending certain timeframes under ERISA and the Internal Revenue Code for employee benefit plans, including long- and short-term disability, as well as participants and beneficiaries of these plans. This guidance included: 

The guidance suspended (1) the date for an individual to file a benefit claim under an ERISA-governed plan, and (2) the date for a claimant to file an appeal of an adverse benefit determination, directing plans to disregard the “Outbreak Period,” defined as March 1, 2020 until 60 days after the announced end of the National Emergency (or other date indicated by an appropriate federal agency). Per ERISA section 518, as amended by section 3607 of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the maximum amount of time that can be disregarded from such timeframes is one year.   

Earlier this year, the Biden Administration announced the National Emergency would end on May 11, 2023. On March 29, 2023, the DOL, Treasury and Department of Health and Human Services (“HHS”) issued an FAQ clarifying how certain actions or elections would work before and after the Outbreak Period ended, confirming that July 10, 2023 (60 days after May 11), is the end of the Outbreak period and that a group health plan may allow for longer timeframes for employees, participants, or beneficiaries to complete these actions. 

Recently, President Biden signed into law a joint congressional resolution H.J. Res. 7 (Public Law No. 118-3 04/10/2023) terminating the National Emergency as of April 10, almost a month earlier than the Administration’s previously announced date of May 11, 2023. Following the President’s signature on this resolution, various sources have reported informal guidance from DOL representatives indicating that the Departments will still recognize July 10, 2023, as the end of the Outbreak Period. We don’t know whether or not the agencies will provide formal guidance confirming these statements. We will continue to monitor guidance from the agencies and provide further updates as needed. 

What Happens Until July 11, 2023? 

Until July 11, 2023, claimants and plan sponsors should continue to apply the suspension or tolling rules as described in Notice 2021-01. Determining claims and appeals timeframes is a unique analysis for each individual under the suspension guidance. Some of these timeframes may end earlier if the one year maximum has not ended by July 10, 2023.

These changes may be difficult to interpret. Let’s look at a scenario and the right way to handle it: 

  • Jane Doe became disabled and potentially eligible for short-term disability benefits on March 1, 2023.
  • The plan typically requires the employee to file a short-term disability claim within 30 days of becoming disabled (March 31, 2023).

When is the employee’s last day to file a timely short-term disability claim?  

Answer: When determining the 30-day period within which Jane Doe must file a claim, the period of time the Outbreak Period is still in effect should be disregarded. Jane Doe’s deadline is the earlier of March 31, 2024 (one year from the date the claimant became eligible plus the plan’s 30-day filing requirement) or 30 days after July 10, 2023 (the end of the Outbreak Period plus the plan’s 30-day filing requirement assuming no further guidance is issued). Therefore, the last day Jane Doe is eligible to file a short-term disability claim will be August 9, 2023.   

What Happens On July 11, 2023? 

Assuming the DOL, Treasury and IRS do not issue further guidance announcing a different end to the Outbreak Period, the Outbreak Period ends on July 10, 2023 and the extended timeframes for claimants to file claims and appeals will revert to ERISA’s pre-National Emergency timeframes effective July 11, 2023.  

What Employers Should Do 

Plan sponsors should watch for any additional guidance that may be issued by the DOL, Treasury and IRS. They should review plan documents, claims and appeals procedures, and participant communications/notices to make sure these documents are updated to describe the pre-National Emergency timeframes for claims or appeals filed on or after July 11, 2023. They should be prepared to answer questions from claimants regarding their individual timeframe to file a claim or appeal an adverse benefit determination in the interim.   

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