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Last week, we published an eAlert titled, “<a href="~/Publications/Benefit-Plan-Outbreak-Period-Set-to-Expire-at-the" target="_blank" rel="noopener">Benefit Plan ‘Outbreak Period’ Set to Expire at the End of February – Maybe?</a>” that said the benefit plan “Outbreak Period” was maybe set to expire on February 28, 2021, depending on how a one-year limit on deadline suspensions under the Employee Retirement Income Security Act (ERISA) and the federal tax code (the “Code”) is interpreted. We mentioned that it would be nice if the government released guidance on the issue. In a classic case of “ask and you shall receive,” on Friday, February 26, 2021, the Department of Labor (DOL) issued that guidance in <a href="https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021-01" target="_blank" rel="noopener">Disaster Relief Notice 2021-01</a> (the “Notice”).

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The Outbreak Period began on March 1, 2020. The Notice states that individuals and plans with deadlines suspended during the Outbreak Period will have such deadlines disregarded until the earlier of: (a) one year from the date they were first eligible for relief; or (b) 60 days after the announced end of the presidential COVID-19 national emergency (the end of the Outbreak Period). On the applicable date, the deadlines for individuals and plans that were previously suspended will resume, and in no case will a suspended period exceed one year.   Essentially, this means that employers must apply the one-year limit on an individual-by-individual basis. The following examples illustrate this point:

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Importantly, the Notice emphasizes that plan fiduciaries should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames. The Notice further emphasizes that if an employer or other plan fiduciary knows, or should reasonably know, that an individual’s one-year suspension limit is approaching with respect to a particular deadline, the employer or other plan fiduciary should send the individual a notice alerting the individual that their suspension period is ending. With that in mind, employers should identify specific individuals whose original deadlines for the following events would have otherwise fallen during the Outbreak Period:

Employers should have a process to track the one-year limit applicable to each specific individual, and prepare notices and communications with the new, upcoming deadlines. If you need assistance determining the new deadlines or with preparing employee communications, please contact Stephanie Grant, Brianna Richardson or another member of Warner’s Employee Benefits/Executive Compensation Practice Group.

Senior Counsel

Stephanie H. Grant

Associate

Brianna Richardson

Employee Benefits

UPDATE: Government Clarifies End of Benefit Plan “Outbreak Period”

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UPDATE: Government Clarifies End of Benefit Plan “Outbreak Period”

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