By: Kelly Dempsey, Esq.

In case you haven’t heard, the Employee Benefits Security Administration (EBSA) released Disaster Relief Notice 2021-01 on Friday, February 26th to address statutory language in section 518 of Employee Retirement Income Security Act of 19745 (ERISA) and section 7508A(b) of the Internal Review Code (the Code). In plain English, the statutes place a one year limit on the authority originally used to create the “Outbreak Period” – meaning by statute, the tolling of timeframes cannot exceed one year. Since Friday, Phia has received a large amount of questions related to this Notice and what it really means for plans. Phia has certainly read and re-read the Notice to determine what this means for self-funded plans and all the players in the self-funded industry. Unfortunately, some of the examples in the Notice fall short of the guidance we would have expected. We have reached out to the DOL seeking clarification on some other potential fact patterns that we know exist.

In the meantime, we have re-reviewed plan language that we crafted to accommodate all of the COVID-19 related rules and guidance and have made some small adjustments. As things develop, of course there is the potential for more changes.

The Notice does indicate that plans and their claims administrators (or other vendors) may need to reissue or amend any notices that were previously issued to plan participants that did not include accurate information regarding the time in which participants and beneficiaries are required to take action. It also indicates plans should affirmatively send notice to plan participants and beneficiaries.

With that said, the EBSA puts a great emphasis on providing relief to plan participants and their beneficiaries and the undertone suggests that plans should keep this mindset of acting in a manner than is favorable to plan participants. The Notice goes on to specifically say that plans and fiduciaries should act “in good faith and with reasonable diligence under the circumstances.”

The application of the rules and statutory language will no doubt have to be carefully applied on a case by case basis and there will be no shortage of fact patterns that will arise. As always, Phia is here to help navigate these rough waters for plans and their administrators in the self-funded space.