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In Response to COVID-19 DOL Issues New Rule ERISA Rules, explained by James Venable Esq., SPHR and Sue Woods, Esq.

Transcript:

Welcome to our Podcast. I’m Sue Woods, and I’m Senior Compliance Counsel at ReedGroup, and I’m here with James Venable, Vice President of Compliance and Employment Law for ReedGroup, a Guardian company.

Sue: These podcasts are designed to provide quick, easy to understand information about how COVID-19 is affecting employers. On today’s podcast, we’ll discuss the new ERISA claims procedures issued by the Department of Labor which go into effect immediately and alter the claims procedure timelines in several areas under the ERISA regulations.

Sue: So James thanks for joining us, and what is ERISA?

James: Thanks Sue, so ERISA stands for the Employee Retirement Income Security Act of 1974 and it’s a mouthful and it’s why we always just say ERISA. It applies to most private employers and sets the legal standards and guidelines for how employers manage the retirement and benefits plans for their employees.  It’s really the law that was passed in response, there was a lot of shenanigans going on in 70’s in terms of how employers were managing pension plans and benefit plans and so it was really passed to provide some oversight and protect employees from any mismanagement of their retirement plans..

Sue: We’ll that’s great, so what sort of changes did the DOL make to the law recently and how does it relate to COVID-19?

James: So ERISA requires employers and plan administrators to establish reasonable claim procedures and an opportunity for employees to appeal a denial of benefits if they filed a claim.  It also outlines the time frames required under these procedures.  So the new rule suspends certain claim procedure time frames to “disregard” the COVID-19 “Outbreak Period,” and that Outbreak Period was one that was established by the DOL on May 4th and it really begins on March 1st and ends sixty days after the National Emergency notification that was filed in response to COVID-19

Sue: Well that sounds pretty technical. Can you give us a little bit more details about what timelines have been changed?

James: Sure, so the rules specifically impact a couple of dates. So the dates that pertain to an individual filing a claim for benefits under the plan and the date for an individual to file an appeal of a denial of benefits if they filed a claim. So let’s look at an example where the National Emergency declaration ends on April 30, 2020, with the Outbreak Period ending on June 29, 2020, and these are just some hypothetical dates, if an employee became disabled and potentially eligible for short-term disability benefits on April 1, 2020, and a plan typically requires the employee to file a short-term disability claim within 30 days of becoming disabled, under the new rule, the Outbreak Period is disregarded. Therefore, the last day for the employee to file a short-term disability claim is 30 days after June 29, 2020 (when the Outbreak Period ends), which is July 29, 2020.

The timeline to file an appeal has also been extended. For example, if an employee’s claim has been denied, that appeal period is extended as well. So for example if an employee received notification of denial or other adverse benefit determination on January 28, 2020, they would normally have 180 days to file an appeal.  Under the new rule, the Outbreak Period is disregarded and the employee’s last day to submit an appeal is 148 days (180-32 days following January 28 to March 1) after June 29, 2020. That makes the new appeal deadline November 24, 2020.

These new rules make similar changes affecting the calculation of certain deadlines and time periods under group health plans, other employee welfare benefit plans, and employee pension plans subject to ERISA or the Internal Revenue Code, so employers, administrators, and insurers should carefully review the Final Rule in its entirety.  The Outbreak Period, which extends from March 1, 2020 until 60 days after the National Emergency has ended, must be disregarded for both initial level disability requests as well as any timeline around adverse determination submissions.

Sue: Wow that’s a lot of information. So let me see if I understand this. It sounds like these new rules essentially take what is defined as an Outbreak Period and you have to eliminate that entire Outbreak Period from the period of these deadlines. Does that sound about right?

James: That’s exactly right, Sue. So that’s going to be a whole different mind shift for employers or for whoever is managing the plans when a claim or an appeal is submitted to really be aware that they’re going to have to take into consideration that the Outbreak Period should be excluded from how they calculate the time that employees have to respond.

Sue: Thanks James,that’s really helpful. In light of these developments, we advise that employers, administrators, and insurers administering ERISA-governed policies update their claims procedure and appeals process guidelines immediately to ensure proper evaluation under these new rules.  Employers should continue to monitor the latest developments related to COVID-19 on guardianlife.com and ReedGroup.com, as well as information provided by the CDC, DOL, and other applicable resources.

Thank you for tuning in and we hope you’ll join us for our next podcast.

ReedGroup, a wholly owned subsidiary of The Guardian Life Insurance Company of America®. GUARDIAN ® is a registered trademark of The Guardian Life Insurance Company of America ®; ©Copyright 2020 The Guardian Life Insurance Company of America 2020-101706 (5/21)

 

Information provided on this podcast is intended for general educational use. It is not intended to provide legal advice. ReedGroup does not provide legal services. Consult an attorney for legal advice on this or any other topic.