COVID-19-Related COBRA Relief Update


EBSA Relief Notice 2020-01 and the “Join Notice” regarding benefit plans, participants, and beneficiaries affected by the COVID-19 outbreak issued by the Department of Labor, the Department of the Treasury, and Internal Revenue Service provide relief for certain actions until sixty days after the end of the COVID-19 National Emergency, or such other date announced by the aforementioned agencies. This is also known as the “Outbreak Period.”

Beginning March 1, 2020 until 60 days after the end of the National Emergency, plans must disregard the 60-day period to elect COBRA coverage, the 45-day grace period to make your first COBRA premium payment, the 30-day grace period for making monthly COBRA premium payments, and the 60-day deadline to notify the plan of a Social Security Disability award or qualifying event.

COBRA Extension Update

EBSA Notice 2021-01 has since provided additional guidance on the continuation of relief for plan participants due to the COVID-19 Outbreak. Individuals and plans with timeframes that are subject to the relief will not be subject to the traditional election and payment periods until one year from the date they were first eligible for relief, or 60 days after the announced end of the National Emergency (the end of the Outbreak Period), whichever comes first.  On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume.  In no case will a disregarded period exceed 1 year.

Next Steps

No action is required of our client partners at this time. Employers must continue to provide the extended deadlines for impacted individuals, however some individuals may have now exhausted their extended deadline relief. We are informing your COBRA participants of the extended deadlines’ clarified end date with the April premium billing release. Existing notices included with the COBRA election notices have also been updated to address the one year maximum for the deadline extensions.

This update has not disrupted Baker Tilly Vantagen’s handling of the extension compliance. We continue to process enrollments and terminations according to normal COBRA regulations systematically. All late enrollments and payments are put through managerial review prior to exception processing to ensure compliance with the extensions. The clarified year-long maximum will now be considered in addition to the original deadline of the end of the Outbreak Period for enrollment or payment acceptance.

Baker Tilly Vantagen will continue to monitor forthcoming COBRA legislation and advise our client partners expediently as to the impacts and actions required to remain compliant.

American Rescue Plan Act of 2021

Both houses of Congress have now passed the American Rescue Plan Act of 2021. The Act now heads to the White House where President Biden is expected to sign it into law prior to March 14.

The Act will have COBRA implications.  Baker Tilly Vantagen is working diligently to review the legislation as well as our procedures and technology for the optimal service delivery for both our client partners and COBRA members. We will continue to keep you informed as updates become available.