On April 29, 2020, the IRS, Department of Labor and other federal agencies published a final notice providing COVID-19 relief guidance on COBRA extensions. The notice also extended run-out periods for health Flexible Spending Account (FSA) and Health Reimbursement Arrangement (HRA) plans.
Final Notice Guidelines – COBRA Extensions and Claims Filing
Group health plans, disability and other employee welfare plans, and employee pension benefit plans subject to ERISA or the CODE (i.e. Section 125 for FSA) must disregard the period from March 1, 2020 until 60 days after the announced end of the National Emergency or such other dates as announced by the Agencies. This is know as the “Outbreak Period”.
The :”Outbreak Period” will be used in determining the following periods and dates:
- 60-day election period for COBRA continuation coverage;
- Date for making COBRA coverage premium payments;
- Notification date for individuals to tell a health plan of a qualifying event;
- Date for providing COBRA election notice from group health plan sponsor or administrator.
Extended Run-Out Period for FSA and HRA
The run-out period for Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) has also been extended. The run-out period is an extended period of time that allows participants to file claims from the previous plan year. Participants now have until 60 days after the “Outbreak Period” is over, or until further notice, to get reimbursed for eligible health care expenses. As of April 29, there has been no increase in the amount of the carryover that an FSA can allow.
What This Means to Our ClientsAs of May 5, 2020, the “Outbreak Period” has not yet been finalized. Our team is monitoring this aspect of the extension. As it relates to COBRA, our system will be updated to accommodate any changes in regulated dates. As it relates to FSA and HRA claim submission run-out dates, plans can and should extend their current dates at least an additional 60 days. Please contact our office for specifics on your plan run-out provisions.
The final notice for those who are interested is available in the Federal Register. The provision on relief to plan participants can be found in Section III A, Item 5.
Our team will continue to provide updates as they become available.