March 03, 2021
On February 26, 2021, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued Disaster Relief Notice 2021-01 (Notice) to provide guidance on the duration of the COVID-19-related relief regarding certain employee benefit plan deadlines during the Outbreak Period.
The Outbreak Period refers to the period beginning March 1, 2020, the first day of the COVID-19 National Emergency and continues until sixty (60) days after the announced end of the COVID-19 National Emergency, or such other date announced by either the DOL, the Department of Treasury, and/or the Internal Revenue Service (IRS) in a future notification. The relief requires employers to disregard the Outbreak Period when enforcing certain employee benefit plan deadlines and gives plan sponsors additional time to distribute plan notices and disclosures.
Under Federal law, this period cannot exceed one year. Because the Outbreak Period began on March 1, 2020, the relief was expected to expire on February 28, 2021. However, this new guidance allows the relief to extend beyond this date in some situations.
The Notice was issued to clarify the DOL and IRS’ position that a number of COVID-19 deadlines will not (and did not) end on February 28, 2021, for all individuals, but that each individual will have his/her own specific one-year tolling period. This Notice impacts the following deadlines:
The relief in the Notice requires employers to disregard the Outbreak Period when enforcing certain employee benefit plan deadlines and gives plan sponsors additional time to distribute plan notices and disclosures.
The Notice interprets the one-year limit on the relief related to the Outbreak Period to begin on the date the action would otherwise have been required in a given situation. Specifically, individuals and plans will have the applicable periods disregarded until the earlier of:
On the applicable date, the time frames for individuals and plans with periods that were previously disregarded will resume. In no case will a disregarded period exceed one year.
The DOL provides three helpful examples in the Notice:
In all of these examples, the delay for actions required or permitted that is provided by the Notices does not exceed one year.
The DOL recognizes that plan participants and beneficiaries may continue to encounter problems when the relief described above is no longer available, due to the one-year limit. Accordingly, plan fiduciaries should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits in these cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames.
The DOL also acknowledges that full and timely compliance with ERISA’s disclosure and claims processing requirements by plans and service providers may not always be possible. In the case of fiduciaries that have acted in good faith and with reasonable diligence under the circumstances, the DOL’s approach to enforcement will be marked by an emphasis on compliance assistance and includes grace periods and other relief.
For additional information, please contact your Burnham Consultant or Burnham, A Baldwin Risk Partner at 949‐833‐2983 or firstname.lastname@example.org.
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