At Long at Last: COVID-19 National Emergency & Outbreak Period Set to End 

PDF

After much anticipation from employer plan sponsors, the Biden Administration will end the
COVID-19 national emergency and public health emergency declarations (the “National Emergency” and
the “PHE”, respectively) that have been in place since 2020 on May 11, 2023. As detailed herein, this also
means that the Outbreak Period will similarly end on July 10, 2023 (i.e., 60 days after the end of the
National Emergency).

End of the Outbreak Period

The National Emergency declaration gave the federal government the power, through the Department of
Labor, the Department of the Treasury, and the Internal Revenue Service (the “Departments”),
to issue temporary rules regarding, and to provide relief related to, employee benefit plans under the
Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code (“Code”). As
part of this relief, the Departments extended certain heath plan-related deadlines to assist plan sponsors
and participants in meeting their health plan and coverage-related obligations during the pandemic
through creation of the “Outbreak Period,” which commenced on March 1, 2020, and ends 60 days
following the end of the National Emergency (i.e., July 10, 2023).

During the Outbreak Period, plans and participants are to “disregard” the Outbreak Period for the
purpose of calculating the following plan deadlines under ERISA, the Health Insurance Portability
and Accountability Act of 1996 (“HIPAA”), and the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”):

• The 30-day period for exercising special enrollment rights under HIPAA
• The timeframe to file claims for plan benefits;
• The timeframe to file appeals and/or requests for external review for adverse plan benefit
  determinations;
• The 60-day period for electing COBRA continuation coverage;
• The 45-day period for making initial COBRA premium payments;
• The 30-day grace period for making subsequent monthly COBRA premium payments; and
• The 30-day period to enroll in another group health plan (such as a spouse’s plan).

The maximum period of time that must be “disregarded” under these rules is the earlier of: (i)
one year from the date the individual was first eligible for relief under the Outbreak Period, or (ii) the end
of the Outbreak Period (which is 60 days following the end of the National Emergency).

Due to the end of the Outbreak Period, which will conclude on July 10, 2023 (i.e., 60 days following
the end of the National Emergency on May 11, 2013), plans and participants will stop disregarding the
Outbreak Period from their applicable HIPAA, COBRA, and ERISA deadline calculations and will revert to
the normal statutory periods. Below is an example of how this change will apply in a COBRA election
context:

• Employee is terminated and loses his coverage under the employer’s health plan. He receives his
  COBRA election notice on March 1, 2023. Under the normal deadlines, he has 60 days to elect
  COBRA continuation coverage following receipt of his COBRA election notice. While the Outbreak
  Period is ongoing, this 60-day election window is extended by disregarding the Outbreak Period.
  Accordingly, his COBRA election deadline will depend on whether the Outbreak Period ends
  before the one-year anniversary of his COBRA election right.
• In this case, the end of the Outbreak Period (on July 10, 2023) will come first, which means that
  as of July 10, 2023, the Outbreak Period is no longer disregarded for the purpose of calculating
  Employee’s 60-day COBRA election period. As such, Employee will have until September 8, 2023,
  60 days following the end of the Outbreak Period on July 10, 2023, to elect COBRA.

As many plan sponsors know, administering these deadlines during the Outbreak Period has been
challenging. Because the end of the National Emergency has been unknown for several years, plan
sponsors have generally been administering these deadlines based on a one-year extension. As a result,
the Outbreak Period extension has been quite generous to participants and beneficiaries, but has also
created administrative hurdles and raised continued questions for plan sponsors and administrators
(particularly related to COBRA premium payment deadlines). Accordingly, the end of the National
Emergency and Outbreak Period is welcome news for plan sponsors and administrators. It is important to
note however that until July 10, 2023, employers must continue to administer their group health plans in
accordance with the Outbreak Period extension rules.

End of the COVID-19 Testing/Vaccine Mandates

In addition to the end of the Outbreak Period, the end of the PHE on May 11, 2023 will also bring
the end of the cost-free COVID-19 testing/vaccine mandates. As background, beginning in 2020, the
Families First Coronavirus Response Act required that all employer-sponsored group health plans (e.g.,
fully insured and self-insured plans) cover COVID-19 testing expenses without any cost-sharing during the
PHE. Under this mandate, and during the duration of the PHE, group health plans could not impose any
deductibles, copays, coinsurance, or any other form of out-of-pocket expenses on plan participants for
their COVID-19 testing expenses. During the PHE, this mandate was extended to require that covered
plans also cover, without any cost-sharing, vaccines from out-of-network providers, and over-the-counter
COVID-19 tests.

With the expiration of the PHE on May 11, 2023, these cost-free COVID-19 testing and vaccine
coverage mandates will no longer apply. As such, beginning on and after May 11, 2023, group health plans
can apply cost-sharing to these items and services. Notably, however, this change does not apply to non-grandfathered group health plans and their coverage of in-network COVID-19 vaccines, which must be provided without any cost-sharing pursuant to the ACA’s preventative services mandate.

Next Steps

Employers should begin preparing for the unwinding of the Outbreak Period extension rules in
advance of the end out of the Outbreak Period on July 10, 2023. Most notably, employers (along with
their third-party administrators (“TPAs”), as applicable) should notify any participants or beneficiaries who
may be impacted by this change about the resumption of normal plan deadlines (e.g., any former
employees whose COBRA election deadline was extended under the Outbreak Period but will now be
forthcoming). Similarly, employers who distributed or included with their plan documents (and/or with
any participants communications or election forms) information about the Outbreak Period extensions
should update that information to reflect the end of the Outbreak Period and resumption of normal
deadlines. Moreover, employers that utilize TPAs for their benefit plan or COBRA administration should
go ahead and reach out to their TPAs to ensure they are taking steps to align their internal administration
processes with the normal, pre-pandemic deadlines and procedures.

With regard to the end of the COVID-19 testing and vaccine mandates on May 11, 2023, employer
plan sponsors should determine if they want to continue to offer these items and services on a cost-free
or low-cost basis. Employers (alongside their TPAs or carriers, as applicable) will need to review their plan
documents to determine what, if any, updates may be needed. Additionally, plan sponsors will need to
notify plan participants of any material changes made to the plan. For example, if a plan will begin to apply
cost-sharing on COVID-19 testing and/or out-of-network vaccines, it will need to inform participants (at
least 60 days prior to implementation if this change will impact information contained in the plan’s
Summary of Benefits and Coverage).

If you have any questions or would like additional information about anything discussed in this
Client Alert, please contact a member of the Maynard’s Employee Benefits and Executive Compensation
practice group.

This Client Alert is for informational purposes only and should not be construed as legal advice.
The information in this Client Alert is not intended to create and does not create an attorney-client relationship.