Implications for Benefit Plans of the End of the COVID-19 National Emergency and Public Health Emergency

On Monday, April 10, President Biden signed a congressional resolution immediately ending the COVID-19 National Emergency and he had previously announced that the COVID-19 Public Health Emergency (PHE) will expire on May 11. The end of the National Emergency and the PHE will impact employee benefit plans as various temporary changes established by the Department of Labor (DOL) and the Internal Revenue Service (IRS), as well as Congress, to such plans were linked to the duration of the National Emergency and the PHE, both of which were declared at the start of the COVID-19 pandemic. With the expiration of the National Emergency and the PHE, these temporary changes will now come to an end.

Background

When the COVID-19 pandemic began, the DOL and IRS took steps to minimize negative implications for participants in employee benefit plans on account of the pandemic. To assist participants, various timeframes under such plans were tolled, including, for example, the deadlines for COBRA notices, elections and premium payments, and special enrollment windows. The period during which this tolling applied is generally referred to as the “Outbreak Period,” which is defined as the period ending 60 days after the end of the National Emergency. However, since the statutory authority for the relief does not permit extensions longer than one year, the tolled timeframes end on the earlier of 60 days after the end of the National Emergency and one year from the date the participant was first eligible for relief, resulting in the extended timeframes ending on a rolling basis since March 2021. The impact of the rolling periods lessens the significance for participants and plans of the ending of the National Emergency on these time periods.

In addition, Congress enacted the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which required health plans and insurance providers to cover COVID-19 testing services without cost sharing or other requirements and provided for other reimbursable COVID-19 items and services. These coverages are only required to be provided while the PHE is in effect. The CARES Act additionally required that COVID-19 vaccines be provided free of cost, whether administered by out-of-network or in-network providers.

Consequences of National Emergency End

With the end of the National Emergency on April 10, the Outbreak Period (which provided for the tolling of the various timeframes that were linked to the National Emergency) would end on June 9, which is 60 days after the end of the National Emergency. The DOL, however, has informally advised practitioners that it plans to issue guidance extending the Outbreak Period until July 10. Although the DOL has not yet issued the guidance, we recommend that plan sponsors act on the basis of the DOL’s informal guidance and treat the tolling of the various deadlines as ending on July 10.

The tolled time periods apply to the following:

• The 30-day period (or 60-day period, if applicable) to request a HIPAA special enrollment.
• The time period to file a claim for benefits, appeal an adverse benefit determination as well as request an external review of certain adverse benefit determinations.
• Several COBRA time periods:
  • The 60-day period for employees to notify the plan of a COBRA qualifying event or disability determination.
  • The period for employers to notify participants of their rights to coverage following a COBRA qualifying event.
  • The 60-day period in which to elect COBRA continuation coverage.
  • The period in which COBRA premium payments must be paid.

For example, if an individual’s COBRA qualifying event occurred on or after July 10, 2022, and assuming the Outbreak Period ends July 10, the individual will have until 60 days after July 10 (or Sept. 8) to request COBRA coverage. The coverage will then be retroactive to the date of the event.

Consequences of PHE End

With the end of the PHE, the following FFCRA and CARES Act provisions will end on May 11, 2023:

• Requirement that benefit plans cover COVID-19 tests and testing without cost sharing, prior authorization or other medical management requirements.
• Requirement that out-of-network COVID-19 vaccines be provided free of cost. Note, in FAQs issued by the DOL, in-network COVID-19 vaccines must still be provided free of cost, even with the end of the PHE.

While plans will no longer be required to cover these services at no cost to participants, plans can still choose to do so. The DOL has stated that while not required, plans are “encouraged” to continue to provide this coverage without cost sharing or medical management requirements.

Generally, if a plan sponsor or issuer is making a change that impacts the Summary of Benefits and Coverage (SBC), it must provide 60 days’ advance notice of the changes. However, DOL guidance provides that plan sponsors are relieved from providing 60 days’ advance notice if they discontinue these benefits, provided that the plan sponsor or issuer has done or does one of the following:

• Previously notified plan participants for the current plan year that these items only are covered for the duration of the PHE. Note, this does not apply to notices made with respect to any prior plan years, even if those notices provided that the benefits will only be available for the duration of the PHE.
• Notifies plan participants “within a reasonable timeframe” in advance of the change. The DOL has not advised on what constitutes a “reasonable timeframe.” We recommend that notice be sufficiently in advance to allow participants and beneficiaries to plan for the changes.

Regardless, we recommend that plan sponsors provide notice to plan participants and beneficiaries of the changes with sufficient time for such individuals to plan appropriately.

Next Steps for Employers

The Department of the Treasury, DOL and the Department of Health and Human Services jointly issued FAQs (here) on March 29 that address the impact of the end of the National Emergency, PHE and Outbreak Period on employee benefit plans.

Plan sponsors and administrators should consider how and when to notify participants of the upcoming end of the National Emergency, PHE and Outbreak Period and the impact on their benefits. In addition, we recommend that plan sponsors review their plan documents, election forms and employee communications to ensure that such documentation properly reflects any changes. Plan sponsors may also want to consider whether they want to voluntarily continue any of the benefits implemented during the pandemic.

If you have any additional questions, please contact a member of the Executive Compensation and Employee Benefits department.