COVID-19 and Employee Health Benefits: What California Plan Administrators Need to Know

May 12, 2020

Regulators Extend Several Enrollment and Continuation Deadlines

Group insurance health plan administrators in California are well aware that their plan’s participants have lots of questions and concerns about COVID-19 and employee health benefits. This is especially true for companies and employees experiencing layoffs, furloughs, or other employment disruptions.

Many rules, deadlines, and legal requirements for administrators and covered employees that made sense before the Coronavirus pandemic may now create unneeded logistical and timing problems that could threaten coverage. Also, with mandatory business shutdowns, some employers have changed or dropped certain employee coverage to save money.

To avoid such hardships, the federal government recently modified several rules to provide employee health plan participants with more flexibility regarding special enrollment periods, COBRA continuation benefits, and claims.

Agencies Announce Extensions for COVID-19 and Employee Health Benefits

On May 4th, 2020, the Internal Revenue Service (IRS) and the Employee Benefits Security Administration (EBSA) announced the extension of certain timeframes and deadlines for group health plans under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.

In their joint announcement, the IRS and EBSA said that due to the national emergency caused by COVID-19, “participants and beneficiaries covered by group health plans…may encounter problems in exercising their health coverage portability and continuation coverage rights, or in filing or perfecting their benefit claims.” Similarly, the agencies also acknowledged that “affected group health plans may have difficulty in complying with certain notice obligations” because of the pandemic and the upheaval in employment that followed the outbreak.

As such, the health insurance agencies in California acted to “take steps to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established timeframes.”

HIPAA: Changes to Special Enrollment Periods

To protect the portability of employer-provided health coverage, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires business health plans to open special enrollment periods when employees experience designated circumstances or life events. These include an employee’s or dependent’s loss of eligibility for a group health plan or other health insurance coverage in which they were previously enrolled.

Employers must also provide a special enrollment period when a covered employee needs to add a dependent due to birth, marriage, adoption, or placement for adoption.

Generally, group health plans in the San Diego region must permit such employees to enroll in the group health plan if they are otherwise eligible and if they make their enrollment request within 30 days of the qualifying event.

Because of COVID-19, all group health insurance plans calculating that 30-day enrollment window must now disregard the period from March 1st, 2020 until 60 days after the announced end of the National Emergency declared on March 13th, 2020 or any other date designated by the agencies (the “Outbreak Period”).

Disregard Outbreak Period For Election of COBRA Continuation Coverage

Qualified health insurance plan beneficiaries in California generally have at least 60 days to elect COBRA continuation coverage under a group health plan. Medical insurance plans cannot require employees to pay premiums for such coverage earlier than 45 days after the employee makes their initial COBRA election. The law also establishes periods within which plans must notify qualified beneficiaries of their right to elect COBRA continuation coverage, and by which employers must notify the plan of certain qualifying events.

As with special enrollment periods, administrators should disregard the time between March 1st and the declared end of the Coronavirus Outbreak Period when calculating the 60-day election period for COBRA continuation coverage or the date for making COBRA premium payments.

Benefit Claim Times Modified

Plans will also exclude the Outbreak Period when calculating the date within which employees can file benefit claims under the plan’s claims procedure, as well as the time within which claimants may appeal an adverse benefit determination.

Questions About COVID-19 and Employee Health Benefits?

Ensuring that workers in the San Diego area stay healthy and covered has become just one of the challenges that businesses and employees face during these unprecedented times.

Preferred Insurance California, an experienced health insurance broker located in Oceanside, CA, is here to help. Our group health insurance experts can answer your COVID-19 and employee health benefits questions and provide practical, affordable solutions. We can meet all of your coverage needs remotely and handle everything via video conferencing, telephone, or email.

Call Preferred Insurance to schedule a free consultation about your small business or individual health insurance needs.