Major Changes to Health Insurance and COBRA Rules

The Departments of Treasury and Labor, along with the IRS has created a time-frame extension affecting group health and welfare, disability, and pension plans due to COVID-19.

These new rules apply for 60 days after the announced end of the declared National Emergency. This 60-day period is now called the ‘Outbreak Period’.

Health Insurance

Current Rules:

Employees have the right to enroll under 3 situations only:

1. When initially hired, subject to the company’s waiting period.
2. At open enrollment, which normally coincides with the plan’s renewal date.
3. When there is a life qualifying event (i.e. marriage, birth, etc.); the employee can enroll within 30 days of the qualifying event.

New Rules:

• Employees with a qualifying life event now have up to 30 days after the end of the ‘Outbreak Period’ to submit the request for retroactive enrollment.
• The Special Election Period Allowance currently applies to Medical coverage only.
  There is no guidance indicating this applies to dental and vision.
  We expect this to be a carrier decision.

Additional New Rules:

• Employees who previously opted out of coverage may now be able to join
  the employer’s plan.
  This is subject to carrier discretion. Call us for the particulars.
• Health carriers continue to allow furloughed employees to remain eligible
  for coverage even though for many this does not meet their minimum
  eligibility guidelines.

Our Recommendation:

Please notify your employees (active and furloughed) of these rule changes.

 COBRA 

Current Rules:

• Employees impacted by a COBRA qualifying event have 60 days to elect COBRA, and 45 days thereafter to make payment for coverage retroactive to their last day of coverage.
• A participant actively enrolled in COBRA has 30 days from the first of each month to make payment for continued coverage.

• Initial election period is extended to 60 days from the last day of the ‘Outbreak Period’.
• Actively enrolled COBRA participants now have 30 days from the last day of the ‘Outbreak Period’ to submit retroactive premium payments.

These Federal rules only apply for groups 20 or larger, each state has its own continuation rules for employers with less than 20 employees.

Our Recommendation:
Please notify your COBRA Participants and adjust your required notifications.

We are automatically notifying all our COBRA Administration Clients and Participants of these brand-new Federal Rule changes.

Employers are ultimately responsible for all COBRA rules, including notification requirements.

If think you need help with this, please reach out.