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IRS Provides Further Clarification Regarding COBRA Deadline Extensions

Last year, the DOL and IRS issued joint guidance providing that certain plan related deadlines, including the 60-day deadline to elect COBRA continuation coverage and the 45-day deadline to make COBRA premium payments, would be suspended during the “COVID-19 outbreak period” (i.e., the time period from March 1, 2020 until 60 days after the end of the national emergency or other date announced by the government) for up to one year. The DOL released other guidance earlier this year clarifying that the one-year deadline suspension is applied on an individual basis (see our prior blog post on that guidance here). Recently, the IRS issued Notice 2021-58 (the “Notice”), which clarifies that the extended timeframes for an individual to (i) elect COBRA continuation coverage, and (ii) make initial and subsequent COBRA premium payments, generally run concurrently. The Notice provides that if an individual elects COBRA coverage after the 60-day election period… Continue Reading

IRS Issues Additional Guidance Regarding COBRA Premium Subsidy

As we previously reported here, the American Rescue Plan Act of 2021 (?Ç£ARPA?Ç¥) provides a 100% COBRA premium subsidy to any qualified beneficiary who is entitled to COBRA coverage due to an involuntary termination of employment or reduction in hours of employment. Employers will receive a tax credit for the cost of COBRA premiums for April 1 to September 30, 2021. The IRS recently issued FAQs addressing many issues related to the subsidy, including: (i) subsidy eligibility, (ii) what qualifies as a reduction in hours or an involuntary termination of employment, (iii) the type of coverage eligible for the subsidy, (iv) when the subsidy period begins and ends, (v) the extended election period, (vi) coordination with the extended deadlines due to the COVID national emergency (?Ç£Outbreak Period Extensions?Ç¥), (vii) payments to insurers, (viii) application to state continuation coverage, and (ix) calculation and claiming of the subsidy tax credit. One of… Continue Reading

2019 FSA Claims Submission Deadlines Suspended

Many employer-sponsored flexible spending arrangements (?Ç£FSAs?Ç¥) have a claims submission deadline in March 2020 for the 2019 plan year. Some FSA vendors have contacted employers about extending those claims submission deadlines to later in the summer because participants could be delayed in submitting claims due to the COVID-19 pandemic. Generally, claims submission deadlines are set by plan design and are not regulated. However, the U.S. Departments of Labor and Treasury recently issued a notice suspending the deadline for submitting claims under all employee welfare benefit plans and employee pension benefit plans. The time period from March 1, 2020 until 60 days after the end of the national emergency or other date announced by the government (?Ç£Outbreak Period?Ç¥) is disregarded in determining whether the deadline to submit a claim was met. The notice did not specifically address how the suspended deadlines are supposed to work for FSAs. Arguably, if the deadline… Continue Reading

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