By: Jennifer Berman, CEO of MZQ Consulting
On October 6, 2021, the Department of Labor, the Department of Treasury, and the Internal Revenue Service jointly released Notice 2021-58. The Notice further clarifies how the “outbreak period” rules impact certain COBRA-related deadlines.
As previously reported, in response to the COVID-19 pandemic, deadlines related to COBRA elections and premium payments were extended in March 2020. At that time, plans were required to disregard the period for elections and premium payments until 60 days after the end of the National Emergency. February 2021 guidance then clarified that the “extension” created by the “outbreak period” cannot exceed one year. At the end of the year-long extensions, the original deadlines associated with COBRA would apply.
The emergency relief extended the following COBRA timeframes:
- Initial 60-day election period.
- Due dates for premium payments.
- The time period for notification of qualifying events.
- The date for plans/employers to provide COBRA election notices.
Total Available Extension is One Year
Notice 2021-58 clarifies that the year-long extension for electing COBRA and the year-long extension for making premium payments run concurrently in most situations. This means that a qualified beneficiary could not wait for a full year (plus the 60-day election period) to elect COBRA and then another full year (plus the 45-day payment period) to pay for coverage. Said differently, the maximum time period between when a qualified beneficiary first becomes eligible to elect COBRA and when payment is due is 1 year plus 105 days. This is comprised of the year-long extension + 60-day election period + 45-day payment period.
The agencies note that some qualified beneficiaries may not have previously understood that the multiple extensions of up to one year are unavailable. Therefore, the Notice also provides that any COBRA premium made by November 1, 2021, will be considered timely so long as it is made within one year and 45 days following the date of their COBRA election.
As a reminder, the extension described here does not apply to qualified beneficiaries electing the COBRA subsidy under the American Rescue Plan (ARP) of 2021. The regular COBRA deadlines apply to the ARP subsidies, which generally expired on September 30, 2021.