Last minute guidance affects employers sponsoring group health plans, and answers a much-discussed question as we approach the one-year anniversary of past COVID guidance. Today the Department of Labor issued long-awaited guidance concerning whether certain employee benefit plan deadlines will continue to be suspended or whether the clock begins ticking again as of March 1, 2021. As we explain, the answer is, well, kind of both.
Last year, due to the COVID-19 pandemic, the Department of Labor, in conjunction with the Department of Treasury, issued guidance and a rule that extended certain timeframes otherwise applicable under ERISA and the Internal Revenue Code (Code). The goal was to provide enhanced flexibility in an era of unknowns. Specifically, the Departments ordered all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Code to “disregard” the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency due to COVID-19 or such other date announced by the Departments in a future notification (the “Outbreak Period”) for certain specified actions.
This action was taken by the Departments pursuant to their statutory authority under ERISA section 518 and Code section 7508A, which permits them to prescribe a period of up to one year that may be disregarded in determining the date by which any action is required or permitted to be completed by an employee benefit plan, plan sponsor, plan administrator, participant or beneficiary. Continue Reading