National Emergency and Outbreak Period Ending

In late January of this year, the White House announced that it intended to end the pandemic-related National Emergency and the separate Public Health Emergency on May 11, 2023. We wrote about that previously here. However, Congress passed a resolution that ends the National Emergency immediately, and President Biden signed it Monday, April 10, 2023. There is a small chance employee benefit rules subject to the National Emergency will end a few weeks earlier than originally anticipated, but all indications from regulators thus far indicate the Outbreak Period dates in FAQs Part 58 will stand in order to avoid confusion. The new legislation does not change the date for the end of the Public Health Emergency issued by the Department of Health and Human Service (HHS). HHS has not announced plans to change the end date for the Public Health Emergency from the previously declared May 11, 2023 date.

Background

As a reminder, these two emergency declarations affect health plans in different ways:

1. The National Emergency was first declared by President Trump on March 1, 2020, and has been renewed annually ever since. Subsequently, the Department of Labor (DOL), HHS, the Treasury Department (Treasury), and the Internal Revenue Service (IRS) issued a joint notice defining an “Outbreak Period,” which runs an additional 60 days after the end of the National Emergency. The joint notice Outbreak Period rules determine how long various benefits-related deadlines, such as COBRA notices, elections, and payments; HIPAA special enrollments; and ERISA claims and appeals deadlines, are extended.
2. The Public Health Emergency was first declared by HHS in March of 2020, and has been renewed every three (3) months since. The Public Health Emergency, among other things, requires health plans to cover various COVID-related services, like vaccines, tests, and treatments, at no cost.

National Emergency Ending

FAQ Part 58 indicates the Outbreak Period will end July 10, 2023.  Any deadlines that were being disregarded during the Outbreak Period will resume July 11, 2023, unless they announce a different date.

Impact on Joint Notice Deadlines

The DOL, HHS and Treasury recently released FAQs Part 58 clarifying how the end of the National Emergency will impact employee benefit related delayed deadlines. In short, for affected events that occurred less than 12 months before the end of the national emergency, participants will have their normal deadline imposed beginning the day after the Outbreak Period ends.

The Agencies do make a point that the timing of this is largely coinciding with “unwinding” of Medicaid and CHIP coverage.  Given the volume of people affected, the Agencies offer the following comment in bold type: “Nothing in the Code or ERISA prevents a group health plan from allowing for a longer special enrollment period (i.e., a period that extends beyond the minimum 60-day statutory requirement) for employees, participants, or beneficiaries to complete these actions, and employers and group health plans are encouraged to do so” in coordination with their insurer or stop loss insurer. However, they are not giving any special permission to allow retroactive coverage when Medicaid/CHIP coverage is lost.  The usual rules apply where coverage is effective the date they submit an election (or the first of the month after they submit an election if the employer typically has coverage begin the first of the month).  As a reminder, only birth, adoption, or placement with the employee for adoption would have coverage begin retroactively before the date they submit an election.

Examples

The FAQs Part 58 provide examples of how the end of the Outbreak Period works.  Below we will show some examples using July 10 as the end of the Outbreak Period, so deadlines resume tolling starting July 11.  This should help employers think through how to calculate the dates and how to communicate them to employees.  Note federal regulators might issue updated guidance using different dates due to the National Emergency ending sooner, but these are the dates reflected in FAQs Part 58.

Example 1: HIPAA Special Enrollment – Birth. 

If you had a baby February 15, 2023, you would ordinarily have 30 days to exercise your HIPAA special enrollment right, making your deadline March 17, 2023.  But because your event falls within the Outbreak Period, that deadline would not begin to toll until July 11, 2023, giving you 30 days from then until August 9, 2023, to elect coverage that begins retroactively to the February 15^th birth.  Please note we cannot issue an ID card or process claims without an election and payment from you, and you would have a lump sum balloon payment to make by that same August 9^th deadline for your share of back premiums in this example.

Example 2: HIPAA Special Enrollment – Marriage. 

If you are married on April 11, 2023, you would ordinarily have 30 days to exercise your HIPAA special enrollment right, making your deadline May 11, 2023.  But because your event falls within the Outbreak Period, that deadline would not begin to toll until July 11, 2023, giving you 30 days from then until August 9, 2023, to elect coverage.  Coverage would not be effective until the first of the month after you notify us of the event.  Please note we cannot issue an ID card or process claims without an election and payment from you.

Example 3: Cobra Election (and Initial Premium Payment). 

If you were offered COBRA as of April 1, 2023, you would ordinarily have 60 days to submit your election, giving you until May 31, 2023, to elect COBRA.  Because that occurred during the Outbreak Period, the 60 days won’t begin until July 11, 2023, giving you until September 8, 2023, to elect coverage that begins retroactively to April 1, 2023.  However, please note we cannot process claims without an election and payment from you, and you may have a lump sum balloon payment to make for your share of premiums.  If you wait until September to elect COBRA, you will then have 45 days from that election date to pay all premiums for April, May, June, July, August, and September 2023.

Example 4: COBRA Premium Payments. 

For those who had already elected COBRA, if you didn’t keep up all COBRA premiums along the way during the Outbreak Period, note your usual 30-day grace period begins July 11, 2023, giving you until August 9, 2023, to get all back COBRA premiums caught up.

Summary

Stay tuned for additional guidance and details on National Emergency-related benefit changes. Employers must also understand that issues related to the Public Health Emergency are still subject to change effective with the original May 11, 2023 deadline announced by the Biden Administration unless HHS changes that timeframe.

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.