DOL Issues Guidance on “Outbreak Period” Extension Rules

DOL: Outbreak Period Extension Timer Affords Each Individual their own One-Year Pause Period | Corporate Synergies
New Outbreak Period extension guidance clarifies that the one-year pause on certain compliance deadlines is to be assessed individually.

On February 26, 2021, the U.S. Department of Labor’s Employee Benefits Security Administration (DOL) issued guidance clarifying the “Outbreak Period” extension duration of certain COVID-19 relief rules that had paused employee benefit plan deadlines.

The Outbreak Period Rules require employers to disregard the Outbreak Period when enforcing certain employee benefit plan compliance deadlines and give plan sponsors additional time to distribute plan notices and disclosures. Under these Outbreak Period rules, certain benefit plan compliance deadlines are effectively paused beginning with the designation of the U.S. COVID-19 National Emergency on March 1, 2020, until 60 days after the announced end of the National Emergency (the end of the Outbreak Period).

Because ERISA and IRS Code limits the duration that plan compliance deadlines can be disregarded or paused (a “Pause Period”) to one year, the relief – was expected to expire on Feb. 28, 2021. However, the guidance in the DOL’s new Notice allows the relief to extend beyond this date in some situations.

The Notice provides that each individual has their own one-year Pause Period and interprets the limit to begin on the date the applicable plan-related action would otherwise have been required.

Employers and plan sponsors should, as soon as possible, begin the process of discussing the new rules in the Notice with their applicable COBRA administrators, TPAs, insurers and other plan vendors, and begin updating their plan notices and disclosures to account for these new rules.

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