COVID-19 has disrupted nearly every facet of life. The insurance industry is no exception. However, unlike some industries, the insurance industry is governed by a statutorily mandated and rigid system of deadlines imposed by various federal laws. Two of the most important laws are the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). The Department of Labor and the Internal Revenue Service both issue regulations and provide guidance on these laws. These laws affect a variety of employee benefits claims throughout the country. The laws contain numerous strict deadlines. Ordinarily, failing to perform a specific action by a given deadline can have serious ramifications for either the claimant or the provider. Given the current circumstances with COVID-19, it should come as no surprise that insurance companies, other benefits providers and claimants have all had difficulty meeting their deadlines during these trying times. On May 4, 2020, the Department of Labor and the Internal Revenue Service issued a “Joint Notice” providing for an “Outbreak Period” that began on March 1, 2020 and will end 60 days after the declared COVID-19 National Emergency has ended. The Joint Notice temporarily stops most of the claimant’s deadlines established under ERISA and COBRA for the duration of the current crisis.
The Joint Notice applies to many employee benefit programs. It applies to disability plans, pension plans and group health and life insurance plans that are subject to ERISA or COBRA. The Joint Notice affects a wide variety of deadlines, including those related to: filing a benefit claim, filing an appeal of an adverse benefits determination, requesting an external review of an adverse benefits determination, enrolling for benefits under the special enrollment provision of ERISA related to certain life events, electing to continue coverage under COBRA and paying COBRA premiums.
The extension of these deadlines is of critical importance for many employees affected by the current crisis. Whereas many firms have remained open under modified conditions, it is more difficult than usual for people to find legal assistance for their claim for benefits. They also may have greater difficulty obtaining necessary information from their doctor. The governmental stay of ERISA and COBRA deadlines helps to guarantee that employees have enough time to navigate the complicated systems instituted by ERISA and COBRA.
For claimants, one aspect of the Joint Notice is of great importance. The Joint Notice does not specifically provide for an extension to claims processing. The Joint Notice does explain that the Department of Labor acknowledges that timely claims processing may not always be possible. This is particularly true where there is a physical disruption to the plan’s or the service provider’s primary place of business. However, a benefits provider cannot simply ignore the requirement that it provide a prompt determination of a claim for benefits; someone who needs a determination as to whether they are entitled to medical coverage or other benefits cannot be forced to wait until the current situation ends.