Employee Benefit Plan Deadline Relief Due To The COVID-19 VirusApril 30, 2020
The Department of Labor (“DOL”), in conjunction with the Department of Treasury (“Treasury”), the Internal Revenue Service (“IRS”) and the Department of Health and Human Services (“HHS”), has issued disaster relief guidance that eases various employee benefit plan deadlines. The extensions include deadlines for enrollment and benefit claims; for providing certain notices to Plan participants, beneficiaries and other individuals; loans and distribution procedures; and other important deadlines. Notice 2020-01 provides relief from the penalties or enforcement actions that may otherwise be levied on employers who fail to meet certain deadlines due to the COVID-19 virus. The relief is effective March 1, 2020 and remains in effect until 60 days after the announcement of the end of the COVID-19 National Emergency or as otherwise announced by the DOL.
Enrollment and Claims
For group health plans, the guidance provides additional time for deadlines affecting:
- COBRA Continuation of Coverage;
- Special Enrollment Rights;
- Claims for Benefits;
- Appeals of Denied Claims; and
- External Review of Claims.
For disability, retirement and other plans, additional time is afforded for claims for benefits and the appeal of denied claims.
The extensions also apply to notices required by ERISA. Such notices include benefit statements and annual funding notices. In order to be eligible for the extension, the plan fiduciaries must act in good faith to furnish such notices as soon as possible. Good faith includes providing notices through means such as email, text messaging and through websites where the fiduciary reasonably believes the participant or beneficiary has access.
Loans and Distributions
Regarding a failure to follow loan and distribution procedures, the DOL will not consider it a failure if the failure is attributable to COVID-19, the plan takes good faith efforts to comply and reasonable attempts are made to correct any procedural deficiencies, such as obtaining necessary documentation as soon as possible. Please note this relief does not include relief for spousal waiver or spousal consent requirements or other requirements imposed by the Treasury and IRS.
In addition to the above, relief is afforded in connection with COVID-19 resulting in:
- Delays in forwarding 401(k) elective deferrals and loan repayments from company assets to the plan;
- Late blackout notices; and
- Filing delays of forms 5500 and M-1 (multiple employer welfare arrangement filings) that are due between April 1, 2020 and July 15, 2020. Please note form 5500 for calendar year plans continues to be due on July 31, 2020 plus extensions.
The DOL has indicated it will continue to monitor the COVID-19 situation and may issue additional guidance.
If you have questions regarding the COVID-19 disaster relief, please contact a member of the McGrath North Employee Benefits Group identified below or your McGrath North advisor.
Contact information for the complete McGrath North’s COVID-19 Response Team can be found here.
For information regarding additional business-related concerns centered around COVID-19, please visit our COVID-19 Resource Guide here.