Employees Have More Time to Take Action Regarding Health Coverage

The IRS and Department of Labor have issued new regulations, effective May 4, 2020, giving employees more time to make choices concerning their health coverage.  The goal is to minimize the chance that workers lose coverage during the COVID-19 pandemic, by failing to meet existing deadlines under health plans.   The regulations provide that certain time frames under benefit plans must be disregarded from March 1, 2020, until 60 days after the end of the national emergency, unless the agencies provide another applicable date.  In this LR What You Need to Know Now, we describe how the existing deadlines will be impacted by these new regulations, but see this prior What You Need to Know Now for additional information on your options for coverage if you lose employer-sponsored health insurance.

Time to elect new health coverage

An employee or dependent who loses health coverage (for example, if they had coverage through their spouse/parent who loses their job), has the right to elect coverage under their employer’s health plan even though the enrollment period under that plan is over.  An employee can also add a new dependent (whether through marriage, birth, adoption or placement for adoption) to be covered by their employer health plan outside of the enrollment period.  An employee has 30 days from the event (birth, adoption, etc.) to enroll in the plan.

Election of COBRA continuation health coverage and payment of premiums

An employee or dependent who loses employer-sponsored health coverage under certain circumstances (called “qualifying events”) can elect to extend that coverage under COBRA.  Loss of health coverage because of loss of a job or reduction of hours is a qualifying event.  An individual has 60 days to elect COBRA and a timely COBRA premium is paid if made no more than 30 days after the first day of the period for which payment is being made.

Filing Benefit Claims and Appeals

Federal law requires benefit plans to provide a minimum period of time for filing a claim for benefits, as well as an appeal of the denial of a benefit claim (at least 180 days for health, disability and disability pension claims and 60 days for pension claims).  Check your plan’s summary plan description or booklet for the time limits applicable to you.

Filing for external review of a health claim

Some employee health plans and health insurers provide a process for external review of claims to an independent reviewer.   The timeframe for submitting a claim for external review depends on whether a health plan uses a state or federal review process.  For example, under the federal review process, a participant has four months to request an external review.

What the regulations do

Under the new regulations, in determining the time by which an employee must take any of the above actions, the time period from March 1, 2020 until 60 days after the announced end of the national emergency is disregarded (unless IRS and DOL provide another date).  Because the national emergency ended on April 30, 2020 (unless extended further), the time period to be disregarded is March 1 through June 29, 2020.  These dates could change if the national emergency is extended beyond April 30, 2020.  For example, a worker loses health coverage due to reduced hours and, on April 1, 2020, her employer informs her she has the right to elect COBRA coverage.  Because the time period through June 29, 2020 is disregarded, she has until August 28, 2020 to elect COBRA (that is, 60 days after June 29, 2020).