COBRA compliance is an area that, for many employers, is on auto-pilot. Many employers rely on outside consultants to administer COBRA and need not put much focus on COBRA time limits for electing and paying for coverage. One of the many ripples from the COVID-19 pandemic is a need to check on your method for COBRA compliance. The economic crunch from the pandemic has resulted in layoffs, furloughs, and terminations, many of which were COBRA-triggering events.

The Internal Revenue Service (IRS) and Department of Labor (DOL) have issued a joint rule extending certain COBRA deadlines in recognition of the challenges posed by stay-at-home orders and other COVID-19 circumstances.

Here are the basics: The joint rule establishes an “outbreak period” that began March 1, 2020 and ends 60 days after the federal COVID-19 national emergency has ended.  The joint rule says that the outbreak period is to be excluded in determining the following COBRA deadlines:

  • The 60 day period for electing COBRA coverage;
  • The deadline for making COBRA premium payments;
  • The deadline for individuals to notify the Plan about a COBRA-qualifying event, such as death, divorce, or reaching adulthood.
  • The dates by which a COBRA notice of rights must be provided.

Also, a new government model notice of COBRA rights was issued on May 1, 2020. A copy can be found here.

Employers who administer COBRA benefits should do a comprehensive review to be aware of the revised time limits and other changes.  Employers relying on third-party consultants for COBRA compliance should contact those consultants to see if any additional or revised steps are needed by the employer to ensure compliance.

Information about COVID-19 and its impact on local, state and federal levels is changing rapidly. This article may not reflect updates to news, executive orders, legislation and regulations made after its publication date. Visit our COVID-19 resource page to find the most current information.