Court Approves “Late” COBRA Election Notice under Deadline Extension

Under a rule promulgated by the DOL and IRS, certain health plan deadlines—such as COBRA deadlines, special enrollment deadlines, and claims and appeals deadlines—are tolled during the COVID-19 “outbreak period.” The outbreak period begins March 1, 2020, and ends 60 days after the end of the COVID-19 national emergency. In EBSA Disaster Relief Notice 2021-01, the DOL clarified that applicable deadlines that fall within the outbreak period will be extended to the earlier of (1) one year from the date of the original deadline, or (2) the end of the outbreak period. Therefore, each individual deadline may not be delayed more than one year.

In one of the first court decisions made regarding this deadline extension, a federal court in Nebraska addressed an employer’s failure to furnish the COBRA election notice by the usual deadline. In this case, the employee was terminated in March 2020 and thereafter lost her health coverage. Under normal circumstances, an employer must furnish the COBRA election notice within 44 days of the qualifying event. This employer did not provide the employee with the election notice until November 2020.

Relying on the final rule and EBSA Disaster Relief Notice, the court found that the November 2020 election notice was a timely notification of the participant’s right to elect COBRA. Therefore, the employer did not violate COBRA requirements.

This court’s acknowledgement of the extension of certain timeframes by the DOL and IRS is a welcome decision to health plans that may have missed COBRA deadlines during the pandemic.