News & Events U.S. Department of Labor announces guidance for employee benefit plans impacted by COVID
U.S. Department of Labor announces guidance for employee benefit plans impacted by COVID
This legislative update includes information related to the recent U.S. Department of Labor guidance for employee benefit plans impacted by COVID-relief deadline extensions. Read below for how this guidance may affect Employee Retirement Income Security Act (ERISA) employers with health reimbursement accounts and/or Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits.
The Department of Labor (DOL) recently posted guidance on the Continuation of Relief for Employee Benefit Plans and Plan Participants and Beneficiaries Due to the COVID-19 Outbreak — Disaster Relief Notice 2021-01. The guidance clarifies that the “Outbreak Period” extension, which commenced March 1, 2020, is limited by law to a period of 1 year, or until the end of the Outbreak Period, whichever period is shorter.
As of this date, the Outbreak Period (which runs from March 1, 2020 through to 60 days after a yet to be announced end of the COVID-19 National Emergency period) is still in effect.
Impact to COBRA (ERISA employers)
We’re currently working with our internal teams to better understand the guidance and impact to COBRA. We’ll provide more information as soon as we have updates to share.
Impact to 2019 health reimbursement accounts (ERISA employers)
Since we don’t have an “Outbreak Period” end date, PayFlex will comply with the 1-year expiration date for 2019 runout extensions. This means:
- The deadline to submit eligible 2019 claims for Health Reimbursement Arrangements (HRAs), Health Care Flexible Spending Account (FSAs) and Limited Purpose FSAs is 1-year from the original runout deadline date.
- The deadline to appeal denied 2019 claims for HRAs, Health Care FSAs and Limited Purpose FSAs is 1-year from the date of the denial.
What to expect?
If you offer a PayFlex health reimbursement account, we’re in the process of updating all runout dates within our system.
Here’s an example: If your original 2019 runout deadline was March 31, 2020 (pre-mandate), your final 2019 runout deadline is March 31, 2021.
- Your members can expect to see the updated runout date via the PayFlex member website and mobile app within the next week.
- If you need assistance communicating the final deadline to your employees, click here to download sample messaging.
Impact to 2020 health reimbursement accounts (ERISA employers)
With the “Outbreak Period” end date still unknown, the runout extension mandate also impacts eligible 2020 claims for Health Reimbursement Arrangements (HRAs), Health Care Flexible Spending Account (FSAs) and Limited Purpose FSAs.
What to expect?
If you offered a PayFlex health reimbursement account for 2020, see details below:
- We’ll extend the 2020 claim filing deadline in phases to help limit disruption until the Outbreak Period end date is confirmed.
- If a member has unused health reimbursement funds in their 2020 account, plus out-of-pocket expenses they haven’t submitted yet, they can continue to submit eligible claims until their extended runout deadline.
- Members will see their extended deadline on related correspondence, the PayFlex member website and PayFlex Mobile app.
- We’ll also work to ensure eligible 2020 claims aren’t being denied.
How may this mandate impact you, as the employer?
This runout extension may result in financial impact to you/the employer. With additional claims being paid out, you may end up funding more claims than you originally anticipated. Please ensure the proper funds are allocated on your end to support such reimbursements.
For more information, visit the PayFlex COVID-19 Resource Center.