COBRA: New, Extended Healthcare Plan Deadlines All Employers Should Know


As a result of new guidance issued in response to the COVID-19 pandemic, employees now have more time to elect and pay for healthcare continuation coverage under COBRA. On May 4, 2020, the U.S. Department of Labor and Internal Revenue Service released a new Final Rule on this temporary extension. Here is a link to the Final Rule.

Generally, employers with 20 or more employees must provide employees who lose healthcare plan coverage under an employer-sponsored plan due to a qualifying event, the opportunity to elect to continue coverage under their employer-sponsored health plan for up to 18 months. Prior to the new Final Rule, employees and their dependents had up to sixty (60) days from receipt of a COBRA notice to elect continuation of their health coverage following a qualifying event.  A qualifying event can include the loss of a job or reduction in work hours. Now, under the new Final Rule, the 60-day window to elect continuation coverage does not begin until the end of the “Outbreak Period.” The Outbreak Period is defined as March 1, 2020, to 60 days after the end of the declared COVID-19 national emergency, or another date if provided by the agencies in future guidance.   Therefore, if the emergency declaration expires as written on June 29, 2020, the Outbreak Period will end on August 28, 2020.

Also, prior to the new Final Rule, premium payments were usually required 45 days from the COBRA election, with a 30-day grace period. Now, premium payments are not due until 30 days after the “Outbreak Period.”  In addition, the New Final Rule extends the time for plan participants to file benefit claims or appeal denied claims.

Employers in Pennsylvania (and other states with mini-COBRA statutes), who have fewer than 20 employees, should be aware that the deadline extensions of the new Final Rule do not apply to them. However, those employers should keep abreast of ever changing developments as state and federal agencies continue to issue guidance in response to the pandemic that can impact employer obligations and employee healthcare benefits.

If you have any questions regarding your obligations as an employer, please contact us using the form below, or give us a call at 610-797-9000. We wish you well during these extraordinary times.

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