After three years of the pandemic, the Biden Administration announced the COVID-19 National Emergency will end on May 11, 2023. What is the significance of this date, and what is its impact on Employee Retirement Income Security Act (ERISA) disability plans’ claims and appeals timeframes?
Background – COVID National Emergency and Agency Guidance
On March 13, 2020, President Donald Trump signed the Proclamation declaring the National Emergency effective March 1, 2020. In Spring 2020 and 2021, the Department of Labor (“DOL”), the Department of Treasury (“Treasury”), and the Internal Revenue Service (“IRS”) published guidance extending certain timeframes under ERISA and the Internal Revenue Code for employee benefit plans, including long- and short-term disability, as well as participants and beneficiaries of these plans. This guidance included:
- EBSA Disaster Relief Notice 2021-01 (“Notice 2021-01”)
- EBSA Disaster Relief Notice 2020-01
- Final Rule
As explained in our initial posting and March 2021 posting, the guidance suspended (1) the date for an individual to file a benefit claim under an ERISA-governed plan, and (2) the date for a claimant to file an appeal of an adverse benefit determination, directing plans to disregard the “Outbreak Period,” defined as March 1, 2020 until 60 days after the announced end of the National Emergency (or other date indicated by an appropriate federal agency). Per ERISA section 518, as amended by section 3607 of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the maximum amount of time that can be disregarded from such timeframes is one year. Until now, the end of the Outbreak Period was unknown.
What Happens On July 11, 2023?
Assuming the DOL, Treasury and IRS do not issue further guidance announcing a different end to the Outbreak Period, the Outbreak Period ends on July 10, 2023 and the extended timeframes for claimants to file claims and appeals will revert to ERISA’s pre-National Emergency timeframes effective July 11, 2023.
What Happens Until July 11, 2023?
Until July 11, 2023, claimants and plan sponsors should continue to apply the suspension or tolling rules as described in Notice 2021-01. Determining claims and appeals timeframes is a unique analysis for each individual under the suspension guidance. Some of these timeframes may end earlier if the one year maximum has not ended by July 10, 2023. See our March 2021 posting for tolling calculation examples.
These changes may be difficult to interpret. Let’s look at a scenario and the right way to handle it: Jane Doe became disabled and potentially eligible for short-term disability benefits on March 1, 2023. The plan typically requires the employee to file a short-term disability claim within 30 days of becoming disabled (March 31, 2023). When is the employee’s last day to file a timely short-term disability claim?
Answer: When determining the 30-day period within which Jane Doe must file a claim, the period of time the Outbreak Period is still in effect should be disregarded. Jane Doe’s deadline is the earlier of March 31, 2024 (one year from the date the claimant became eligible plus the plan’s 30-day filing requirement) or 30 days after July 10, 2023 (the end of the Outbreak Period plus the plan’s 30-day filing requirement assuming no further guidance is issued). Therefore, the last day Jane Doe is eligible to file a short-term disability claim will be August 9, 2023.
What Employers Should Do
Plan sponsors should watch for any additional guidance that may be issued by the DOL, Treasury and IRS. They should review plan documents, claims and appeals procedures, and participant communications/notices to make sure these documents are updated to describe the pre-National Emergency timeframes for claims or appeals filed on or after July 11, 2023. They should be prepared to answer questions from claimants regarding their individual timeframe to file a claim or appeal an adverse benefit determination in the interim.
What ReedGroup Is Doing
If you’re looking for assistance managing leave of absence, disability benefits, or accommodations or to ensure compliance across your organization, ReedGroup, Alight’s leave management division, has solutions for you. Review our offerings here.
Information provided on this blog 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.