Coronavirus (COVID-19) Regulations & Benefit Plan Considerations

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Table of Contents

Legislation Overview

FFCRA Compliance Considerations

The CARES Act Compliance Considerations

Benefit Plan Compliance Considerations

When do Regulatory Changes Apply?
Extension of Deadlines

Employee Disclosure

Download COVID-19 Extension Notice for employees


Legislation Overview

REMINDER: Regulatory actions require plans to extend certain time frames (e.g., claims and appeals deadlines).

The FFCRA and CARES Act legislation extended certain guidelines applicable to plan administration actions. What does this mean for employers? Plans covered by ERISA or the IRS Code are likely to experience administrative management changes to comply with regulatory deadline extensions.

Per the Department of Labor’s Disaster Relief Notice 2021-01 (Notice), revised deadline extensions last the earlier of

For plan administrators, this essentially means each person now has an individual deadline based on their specific situation. Furthermore, plans must act in good faith and consider their fiduciary duty to act in the best interest of plan participants.  This may include additional notification to a participant of a deadline affecting coverage.  A special enrollment period is now open through May 15, 2021 for insurance through the Exchange.

The Notice affects deadlines for the following: COBRA; HIPAA Special Enrollment; Claims Procedures; and the External Review Process.  The Notice includes deadlines to:


Families First Coronavirus Response Act (FFCRA):

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

Coronavirus (COVID-19) Resources by State


FFCRA Compliance Considerations:

Mandated Coverage

The CARES Act Compliance Considerations:

Expansion of Coverage for COVID-19 Testing – Updates to the FFCRA

On April 11, 2020, the Department of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) released FAQs regarding the FFCRA and CARES Act. Within these FAQs, the Departments expanded the term “diagnostic testing” to include serological tests. Serological tests for COVID-19 are used to detect antibodies against the SARS-CoV-2 virus, and are intended for use in the diagnosis of the disease or condition of having current or past infection with SARS-CoV-2, the virus which causes COVID-19.

Reimbursement for COVID-19 Testing

Over-the-Counter COVID-19 Testing: FAQ 51:

Coverage for Preventive Services and Vaccines for Coronavirus

Coverage Confidentiality & Disclosure of Records Relating to Substance Use Disorder, including HIPAA Updates

Over-the-Counter Drugs and Menstrual Care Products

Telehealth Services Encouraged


Benefit Plan Compliance Considerations:

Americans with Disabilities Act (ADA)

The ADA typically prohibits employers from requiring employees to submit to medical exams, however, because the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, special rules apply in the case of pandemics such as COVID-19:

Benefit Plan Documents

All plans must:

Typically, a plan or issuer making a material modification in any of the terms of the plan or coverage that would affect the content of the SBC (that is not reflected in the most recently provided SBC), and that occurs other than in connection with a renewal or reissuance of coverage, must provide the notice of the modification no later than 60 days prior to the date on which the modification becomes effective.

However, the Departments explained in recent FAQs that they will not take enforcement action against any plan and/or issuer that makes such modification to provide greater coverage in relation to the diagnosis and/or treatment of COVID-19 without providing at least 60 days advance notice. Plans and issuers still need to provide notices of these changes as soon as reasonably practicable.

Cafeteria Plans

A section 125 Cafeteria Plan is a written plan maintained by an employer under which all participants are employees, and all participants may choose among two or more benefits consisting of cash and qualified benefits (e.g., employer-provided health plans, health care FSAs, and dependent care assistances programs).

Generally, employee elections of qualified benefits must be made prior to the first day of the plan year and is irrevocable for the plan year (unless the employee experiences a permitted election change event such as when an employee experiences a significant change in cost of coverage).

However, due to unanticipated changes in the need for medical care in response to COVID-19, IRS Notice 2020-29 has relaxed these election rules. Employers sponsoring self-insured plans or insured plans may now amend one or more of their section 125 cafeteria plans to allow employees to make the following mid-year elections:

  1. Make a new election for employer-sponsored health coverage on a prospective basis, if the employee initially declined to elect employer-sponsored health coverage;
  2. Revoke an existing election for employer-sponsored health coverage and make a new election to enroll in a different health coverage sponsored by the same employer on a prospective basis (including changing enrollment from self-only coverage to family coverage);
  3. Revoke an existing election for employer-sponsored health coverage on a prospective basis, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer (page 8 of the Notice provides an example of an acceptable written attestation);
  4. Revoke an election, make a new election, or decrease or increase an existing election regarding a health FSA on a prospective basis (this applies to all types of health FSAs); and
  5. Revoke an election, make a new election, or decrease or increases an existing election regarding a dependent care assistance program on a prospective basis.

The Notice reminds us that the mid-year elections described above may be utilized at the discretion of the employer and that, if permitted, they must be applied on a prospective basis only and must comply with section 125 nondiscrimination rules. Additionally, if an employer decides to amend one of more of its section 125 cafeteria plans to provide any of the mid-year election changes noted above, it must adopt a plan amendment.


COBRA coverage applies to employees on furlough. Employers need to be aware of when a qualifying event may occur because of a reduction in hours or involuntary termination, as sending of notices is required to avoid excise taxes.

IRS Notice 2021-58 provides clarification on how to apply the COBRA extensions created under May 4, 2020’s Joint Notice. The Joint Notice required plans to disregard the period for taking certain actions related to COBRA until 60 days after the end of the COVID-19 Outbreak Period, subject to a maximum disregarded period of one year.

The Joint Notice applies to the:

The disregarded period applies on an individual basis beginning on the date the individual or plan was first eligible for relief under the Joint Notice.

Notice 2021-58 clarifies that the disregarded period for an individual to elect COBRA continuation coverage and the disregarded period for the individual to make initial and subsequent COBRA premium payments generally run concurrently.

The IRS notes that in the absence of its clarification that the disregarded periods run concurrently, some individuals may have assumed that they ran independently.  Therefore, to avoid inequitable outcomes, in no event will an individual be required to make the initial premium payment before November 1, 2021, even if November 1, 2021, is more than one year and 105 days after the date the election notice was received, provided that the individual makes the initial premium payment within one year and 45 days after the date of the election.

Notice 2021-58 reiterates that The Joint Notice extensions do not affect ARPA premium assistance time periods.

American Rescue Plan Act of 2021 (ARPA)
Provides for 100% payment of COBRA premiums for Assistance Eligible Individuals (AEIs)Text-TooltipIndividuals who are eligible for COBRA due to involuntary termination of employment or reduction in hours for any reason and are eligible for COBRA during the premium payment period from April 1, 2021 through September 30, 2021Text-TooltipOr for as long as the AEI remains eligible for COBRA during this period

To learn details applicable to the ARPA COBRA Subsidy, please see the Dashboard’s blogs: COBRA Provisions in ARPA and Additional Guidance from the DOL, the COBRA Notices Geek Out page,  and the DOL web site.

Essential Health Benefits (EHBs)

EHBs generally include coverage for the diagnosis and treatment of COVID-19.

Fiduciary Compliance Guidance

The Department of Labor (DOL) reminds ERISA fiduciaries to continue to act reasonably, prudently, and in the interest of the plan participants and beneficiaries who rely on their health, retirement, and other employee benefit plans for their physical and economic wellbeing during the COVID-19 crisis. Plan fiduciaries should:

The DOL will continue to emphasize compliance assistance and include grace periods and other relief where appropriate during the COVID-19 outbreak.

Flexible Savings Accounts (FSAs)

Health FSA Expansions per the Consolidated Appropriations Act (CAA) of 2021


Title two of GINA prohibits employers from requesting genetic information in the workplace and from using such in a discriminatory manner:

Health Savings Accounts (HSAs) with High Deductible Health Plans (HDHPs)

HIPAA: Notifications of Enforcement Discretion

Health and Human Services (HHS) released a Notification of Enforcement Discretion under HIPAA to (1) permit uses and disclosures of Protected Health Information (PHI) by BA for public health & health oversight activities and to permit a covered health care provider to use audio or video communication technology to provide telehealth to patients.

Business Associates’ (BA) Uses & Disclosures of PHI
Telehealth Remote Communications

HHS’s FAQs on telehealth and HIPAA during COVID-19 can be viewed here.

HIPAA: Privacy & Security

Privacy & Security Rules are still active and in place for Covered Entities (CE)Text-TooltipGenerally, CE are prohibited from disclosing Protected Health Information (PHI) without a patient’s authorization.. PHI created, received, maintained, or transmitted by the health plan is still protected.

Check out our latest blogs for HIPAA reminders during COVID-19 and review these questions to get you thinking about HIPAA in a “work-from-home” context.

Short-Term Disability

If employees don’t have enough sick leave to cover days off from work due to mandatory illness or quarantine:

When do Regulatory Changes Apply?

Extension of Deadlines

Extension of Notices and Disclosures under Title I of ERISA

EBSA Disaster Relief Notice 2021-01

Extension of Timeframes for COBRA, HIPAA, and Claims Decisions

Final Rule


Expanded Family and Medical Leave Act (EFMLA) Provisions

Emergency Paid Sick Leave

Documentation for Leave Under Either Paid Sick Leave or Expanded Family and Medical Leave

Upon receiving a request for paid sick leave or expanded family and medical leave, an employer must document the following information:

If the employee requests leave to care for his or her child whose school or place of care is closed (or child care provider is unavailable), an employee must also document:

Employers must document the above regardless of whether they grant or deny a request for leave. For more information, see Question 15. The information employees must give employers to request paid sick leave or expanded family and medical leave can be found at Question 16.

DOL Temporary Rule: Paid Leave under the FFCRA

On April 6, 2020, the DOL published a temporary rule regarding the implementation and administration of emergency paid sick leave provisions and family and medical leave expansion requirements under the FFCRA. For more information on the temporary rule, click here.

Tax Credits

The Act includes tax credit relief for employers required to make these payments in relation to the FMLA expansion and emergency paid sick leave provisions above. Employers are entitled to a refundable tax credit equal to 100% of expanded FMLA wages paid by employers on a quarterly basisText-TooltipThe cap is $200 per day and up to $10,000 per employee.. Click here for the IRS’ FAQ for small-and-midsize businesses. Employers will be entitled to a refundable tax credit equal to 100% of emergency sick-leave wages paid by employers for each calendar quarter:

For more information on COVID-19 related tax credits for required paid leave provided by small and midsized businesses, see the IRS FAQs.

Flexible Savings Accounts (FSAs)

Form 5500 Series and Form M-1

IRS Notice 2020-23 extends the due date for employee benefit plans required to make the Form 5500 series filings due on or after April 1, 2020, and before July 15, 2020. Plans with filing due dates that land within this time frame, including due dates after filing an extension, will now have until July 15, 2020, to submit these filings to the Department of Labor (DOL).

Plan Year End Date Normal Due DateText-TooltipThe last day of the 7th month after the plan year ends. Extended Due DateText-Tooltip2 ½ month extension through Form 5558 filing with the IRS.
June 30, 2019 January 31, 2020 April 15, 2020
July 31, 2019 February 29, 2020 May 15, 2020
August 31, 2019 March 31, 2020 June 15, 2020
September 30, 2019 April 30, 2020 July 15, 2020
October 31, 2019 May 31, 2020 August 15, 2020
November 30, 2019 June 30, 2020 September 15, 2020


According to EBSA Disaster Relief Notice 2020-01, Form M-1 filings required for multiple employer welfare arrangements (MEWAs) and certain entities claiming exception (ECEs) are provided relief for the same period of time as the Form 5500 Annual Return/Report filing relief stated above.

EBSA Disaster Relief Notice 2020-01


Employers should consult advisers and counsel to disseminate the contents of these new rules and determine applicability to the workforce, including the posting of required notices and compliance with the U.S. Centers for Disease Control (CDC)’s guidance on maintaining a healthy work environment. See ComplianceDashboard’s blog post to review a list of resources for employers.