COVID-19 Changes COBRA

COVID-19 Eliminates Some COBRA Timeframes, May 4, 2020

On March 13, 2020, the President issued the Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak. With the economy coming to a stand still, many employed individuals found themselves terminated and either not offered COBRA because the office was closed or could not accept COBRA and make premium payments because there was nobody to receive them. For this reason, COBRA was temporarily changed to offer these COVID-19 affected employees relief.

Normally, employees were provided a 60-day election period to notify the COBRA Administrator of their desire to accept COBRA. So that these qualifiers would not be left out in the cold if their company was temporarily closed, the law basically eliminated the 60-day election period; allowing them to accept COBRA until the government released the "end of the outbreak period" (plus a 60 day transition period then applying the normal time frames).

In addition, the law protects COBRA Participants by eliminating the time they have to make COBRA premium payments. As you know, COBRA usually offers an initial 45-day initial and 30-day standard grace period to pay COBRA premiums. With the temporary change, these grace periods were eliminated, allowing COBRA Participants unlimited time (or until the grace period is implemented 60 days after the end of the outbreak period is announced) to make COBRA premium payments.

The question then arises, when is the end of the outbreak going to be announced? As of the beginning of 2021, our weekly discussions with the Department of Labor show they do not know - leaving COBRA Administrators in a difficult situation. (Also, be aware the DOL has elected not to change their template notice to COBRA Qualifiers. It still shows the normal election period and grace period time frames.) We will continue to monitor the situation and will post something when we know for sure.

TIP: Many insurers continue to bill for Participants that are not paying premiums. You need to tell them to "suspend" or terminate coverage after the normal grace period. In the rare event, a Participant elects to pay all back premiums to be reinstated and have claims pay, tell the carrier to reinstate.