[Federal Register Volume 82, Number 224 (Wednesday, November 22, 2017)]
[Rules and Regulations]
[Pages 55507-55509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25332]



[[Page 55507]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Parts 2560 and 2590

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54


Extension of Certain Time Frames for Employee Benefit Plans, 
Participants, and Beneficiaries Affected by Hurricane Maria

AGENCY: Employee Benefits Security Administration, Department of Labor; 
Internal Revenue Service, Department of the Treasury.

ACTION: Extension of time frames.

-----------------------------------------------------------------------

SUMMARY: This document announces the extension of certain time frames 
under the Employee Retirement Income Security Act and the Internal 
Revenue Code for group health plans, disability and other welfare 
plans, pension plans, participants and beneficiaries of these plans, 
and group health insurance issuers directly affected by Hurricane 
Maria.

DATES: November 22, 2017.

FOR FURTHER INFORMATION CONTACT: Elizabeth Schumacher or Suzanne 
Adelman, Employee Benefits Security Administration, Department of 
Labor, at 202-693-8335; or Karen Levin, Internal Revenue Service, 
Department of the Treasury, at 202-317-5500.

SUPPLEMENTARY INFORMATION:

I. Purpose

    As a result of Hurricane Maria, participants and beneficiaries 
covered by group health plans, disability or other welfare plans, and 
pension plans may encounter problems in exercising their health 
coverage portability and continuation coverage rights, or in filing or 
perfecting their benefit claims. Recognizing the numerous challenges 
already facing affected participants and beneficiaries, it is important 
that plans and the Employee Benefits Security Administration, 
Department of Labor and Internal Revenue Service, Department of the 
Treasury (the Agencies) take steps to minimize the possibility of 
individuals losing benefits because of a failure to comply with certain 
pre-established time frames. Similarly, the Agencies recognize that 
affected group health plans may have difficulty in complying with 
certain notice obligations.
    Accordingly, under the authority of section 518 of the Employee 
Retirement Income Security Act of 1974 (ERISA), and section 7508A of 
the Internal Revenue Code of 1986 (the Code), the Agencies are 
extending certain time frames otherwise applicable to group health 
plans, disability and other welfare plans, pension plans, and their 
participants and beneficiaries under ERISA and the Code.\1\
---------------------------------------------------------------------------

    \1\ ERISA section 518 and Code section 7508A generally provide 
that, in the case of an employee benefit plan, sponsor, 
administrator, participant, beneficiary, or other person with 
respect to such a plan affected by a Presidentially declared 
disaster, notwithstanding any other provision of law, the 
Secretaries of Labor and the Treasury may prescribe (by notice or 
otherwise) a period of up to one year that may be disregarded in 
determining the date by which any action is required or permitted to 
be completed. Section 518 of ERISA and section 7508A of the Code 
further provide that no plan shall be treated as failing to be 
operated in accordance with the terms of the plan solely as a result 
of complying with the postponement of a deadline under those 
sections.
---------------------------------------------------------------------------

    The Agencies believe that such relief is immediately needed to 
preserve and protect the benefits of participants and beneficiaries in 
affected plans. Accordingly, the Agencies have determined, pursuant to 
section 553 of the Administrative Procedure Act, 5 U.S.C. 553(b) and 
(d), that there is good cause for granting the relief provided by this 
notice effective immediately upon publication and that notice and 
public participation may result in undue delay and, therefore, be 
contrary to the public interest.
    This document has been reviewed by the Department of Health and 
Human Services (HHS), which concurs with the relief. HHS encourages 
plan sponsors of nonfederal governmental group health plans to provide 
the relief specified in this guidance. HHS also encourages States, and 
health insurance issuers, to enforce and operate, respectively, in a 
manner consistent with the relief provided in this guidance.\2\
---------------------------------------------------------------------------

    \2\ Section 104 of Title I of Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) requires that the Secretaries of 
Labor, the Treasury, and Health and Human Services (the Departments) 
ensure through an interagency Memorandum of Understanding (MOU) that 
regulations, rulings, and interpretations issued by each of the 
Departments relating to the same matter over which two or more 
departments have jurisdiction, are administered so as to have the 
same effect at all times. Under section 104, the Departments, 
through the MOU, are to provide for coordination of policies 
relating to enforcement of the same requirements in order to have a 
coordinated enforcement strategy that avoids duplication of 
enforcement efforts and assigns priorities in enforcement. See 
section 104 of HIPAA and Memorandum of Understanding applicable to 
Title XXVII of the PHS Act, Part 7 of ERISA, and Chapter 100 of the 
Code, published at 64 FR 70164, December 15, 1999.
---------------------------------------------------------------------------

    The relief provided by this Notice supplements other disaster 
relief guidance, which can be accessed on the Internet at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief and https://www.irs.gov/newsroom/tax-relief-in-disaster-situations.

II. Background

    Title I of the Health Insurance Portability and Accountability Act 
of 1996 (HIPAA) provides portability of group health coverage by, among 
other things, requiring special enrollment rights. ERISA section 701, 
Code section 9801, 29 CFR 2590.701-6, 26 CFR 54.9801-6. Title X of the 
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) permits 
qualified beneficiaries who lose coverage under a group health plan to 
elect continuation health coverage. ERISA section 601, Code section 
4980B, 26 CFR 54.4980B-1. Section 503 of ERISA and 29 CFR 2560.503-1 
require employee benefit plans subject to Title I of ERISA to establish 
and maintain reasonable procedures governing the determination and 
appeal of claims for benefits under the plan. Section 2719 of the 
Public Health Service Act (PHS Act), incorporated into ERISA by ERISA 
section 715 and into the Code by Code section 9815, imposes additional 
rights and obligations with respect to claims, appeals, and external 
review for nongrandfathered group health plans and health insurance 
issuers offering nongrandfathered coverage. See also 29 CFR 2590.715-
2719 and 26 CFR 54.9815-2719. All of the foregoing provisions include 
timing requirements for certain acts in connection with employee 
benefit plans, some of which are being modified by this notice.

A. Special Enrollment Time Frames

    In general, the HIPAA special enrollment provisions require that a 
special enrollment period must be provided in certain circumstance 
including circumstances in which an employee or dependent loses 
eligibility for any group health plan or other health insurance 
coverage in which the employee or the employee's dependents were 
previously enrolled (including coverage under Medicaid and the 
Children's Health Insurance Program), and upon certain life events such 
as when a person becomes a dependent of an eligible employee by birth, 
marriage, or adoption. ERISA section 701(f), Code section 9801(f), 29 
CFR 2590.701-6, and 26 CFR 54.9801-6. Generally, group health plans 
must allow such individuals to enroll in the group health plan if they 
are otherwise eligible and if enrollment is requested within 30 days of 
the occurrence of the event (or

[[Page 55508]]

within 60 days, in the case of the special enrollment rights added by 
the Children's Health Insurance Program Reauthorization Act of 2009). 
ERISA section 701(f), Code section 9801(f), 29 CFR 2590.701-6, and 26 
CFR 54.9801-6.

B. COBRA Time Frames

    The COBRA continuation coverage provisions generally provide a 
qualified beneficiary a period of at least 60 days to elect COBRA 
continuation coverage under a group health plan. ERISA section 605 and 
Code section 4980B(f)(5). Plans are required to allow payment of 
premiums in monthly installments, and plans cannot require payment of 
premiums before 45 days after the day of the initial COBRA election. 
ERISA section 602(3) and Code section 4980B(f)(2)(C). COBRA 
continuation coverage may be terminated for failure to pay premiums 
timely. ERISA section 602(2)(C) and Code section 4980B(f)(2)(B)(iii). 
Under the COBRA rules, a premium is considered paid timely if it is 
made not later than 30 days after the first day of the period for which 
payment is being made. ERISA section 602(2)(C), Code section 
4980B(f)(2)(B)(iii), and 26 CFR 54.4980B-8 Q&A-5(a). Notice 
requirements prescribe time periods for employers to notify the plan of 
certain qualifying events and for individuals to notify the plan of 
certain qualifying events or a determination of disability; notice 
requirements also prescribe a time period for plans to notify qualified 
beneficiaries of their rights to elect COBRA continuation coverage. 
ERISA section 606, Code section 4980B(f)(6), and 29 CFR 2590.606-3.

C. Claims Procedure Time Frames

    Section 503 of ERISA and 29 CFR 2560.503-1, as well as section 2719 
of the PHS Act, incorporated into ERISA by ERISA section 715 and into 
the Code by Code section 9815, 29 CFR 2590.715-2719, and 26 CFR 
54.9815-2719, require ERISA-covered employee benefit plans and 
nongrandfathered group health plans and health insurance issuers to 
establish and maintain a procedure governing the filing and initial 
disposition of benefit claims, and to provide claimants with a 
reasonable opportunity to appeal an adverse benefit determination to an 
appropriate named fiduciary. Plans may not have provisions that unduly 
inhibit or hamper the initiation or processing of claims for benefits. 
Further, group health plans and disability plans must provide claimants 
at least 180 days following receipt of an adverse benefit determination 
to appeal (60 days in the case of pension plans and other welfare 
benefit plans). 29 CFR 2560.503-1(h)(2)(i), 29 CFR 2560.503-1(h)(3)(i), 
29 CFR 2590.715-2719(b)(2)(ii)(C), and 26 CFR 54.9815-
2719(b)(2)(ii)(C).

D. External Review Process Time Frames

    PHS Act section 2719, incorporated into ERISA by ERISA section 715 
and into the Code by Code section 9815, sets out standards for external 
review that apply to nongrandfathered group health plans and health 
coverage and provides for either a State external review process or a 
Federal external review process. Standards for external review 
processes and timeframes for submitting claims to the independent 
reviewer for group health plans or health insurance issuers may vary 
depending on whether a plan uses a State external review process or a 
Federal external review process. For plans or issuers that use the 
Federal external review process, the process must allow at least four 
months after the receipt of a notice of an adverse benefit 
determination or final internal adverse benefit determination for a 
request for an external review to be filed. 29 CFR 2590.715-
2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i). The Federal external 
review process also provides for a preliminary review of a request for 
external review. The regulation provides that if such request is not 
complete, the Federal process must provide for a notification that 
describes the information or materials needed to make the request 
complete, and the plan or issuer must allow a claimant to perfect the 
request for external review within the four-month filing period or 
within the 48 hour period following the receipt of the notification, 
whichever is later. 29 CFR 2590.715-2719(d)(2)(ii)(B) and 26 CFR 
54.9815-2719(d)(2)(ii)(B).

III. Relief

A. Relief for Affected Plan Participants, Beneficiaries, Qualified 
Beneficiaries, and Claimants

    With respect to plan participants, beneficiaries, qualified 
beneficiaries, or claimants directly affected by Hurricane Maria (as 
defined in paragraph III.C.(1)), group health plans, disability and 
other welfare plans, pension plans, and health insurance issuers 
offering coverage in connection with a group health plan must disregard 
the period from September 17, 2017 through March 16, 2018 for such plan 
participants, beneficiaries, qualified beneficiaries, or claimants 
located in Puerto Rico, and must disregard the period from September 
16, 2017 through March 15, 2018 for such plan participants, 
beneficiaries, qualified beneficiaries, or claimants located in the 
United States Virgin Islands, when determining any of the following 
time periods and dates--
    (1) The 30-day period (or 60-day period, if applicable) to request 
special enrollment under ERISA section 701(f) and Code section 9801(f),
    (2) The 60-day election period for COBRA continuation coverage 
under ERISA section 605 and Code section 4980B(f)(5),\3\
---------------------------------------------------------------------------

    \3\ The term ``election period'' is defined as ``the period 
which--(A) begins not later than the date on which coverage 
terminates under the plan by reason of a qualifying event, (B) is of 
at least 60 days' duration, and (C) ends not earlier than 60 days 
after the later of--(i) the date described in subparagraph (A), or 
(ii) in the case of any qualified beneficiary who receives notice 
under section 1166(4) of this title, the date of such notice.'' See 
ERISA section 605(a)(1). See also Code section 4980B(f)(5).
---------------------------------------------------------------------------

    (3) The date for making COBRA premium payments pursuant to ERISA 
section 602(2)(C) and (3) and Code section 4980B(f)(2)(B)(iii) and (C),
    (4) The date for individuals to notify the plan of a qualifying 
event or determination of disability under ERISA section 606(a)(3) and 
Code section 4980B(f)(6)(C),
    (5) The date within which individuals may file a benefit claim 
under the plan's claims procedure pursuant to 29 CFR 2560.503-1,
    (6) The date within which claimants may file an appeal of an 
adverse benefit determination under the plan's claims procedure 
pursuant to 29 CFR 2560.503-1(h),
    (7) The date within which claimants may file a request for an 
external review after receipt of an adverse benefit determination or 
final internal adverse benefit determination pursuant to 29 CFR 
2590.715-2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i), and
    (8) The date within which a claimant may file information to 
perfect a request for external review upon a finding that the request 
was not complete pursuant to 29 CFR 2590.715-2719(d)(2)(ii) and 26 CFR 
54.9815-2719(d)(2)(ii).

B. Relief for Group Health Plans

    With respect to group health plans, and their sponsors and 
administrators, that are directly affected by Hurricane Maria (as 
defined in paragraph III.C.(3)), the period from September 17, 2017 
through March 16, 2018 for those located in Puerto Rico, and the period 
from September 16, 2017 through March 15, 2018 for those located in the 
United States Virgin Islands, shall be disregarded when determining the 
date for providing a COBRA election notice under ERISA section 606(c) 
and Code section 4980B(f)(6)(D).

[[Page 55509]]

C. Definitions

    For purposes of this notice--
    (1) A participant, beneficiary, qualified beneficiary, or claimant 
directly affected by Hurricane Maria means an individual who resided, 
lived, or worked in one of the disaster areas (as defined in paragraph 
III.C.(2)) at the time of the hurricane, or whose employee benefit plan 
was directly affected (as defined in paragraph III.C.(3)), but solely 
with respect to that employee benefit plan.
    (2) The term ``disaster areas'' means the counties in Puerto Rico 
and the counties and county equivalents in the United States Virgin 
Islands that have been or are later designated as disaster areas 
eligible for Individual Assistance by the Federal Emergency Management 
Agency because of the devastation caused by Hurricane Maria.
    (3) An employee benefit plan is directly affected by Hurricane 
Maria if the principal place of business of the employer that maintains 
the plan (in the case of a single-employer plan, determined 
disregarding the rules of section 414(b) and (c) of the Code); the 
principal place of business of employers that employ more than 50 
percent of the active participants covered by the plan (in the case of 
a plan covering employees of more than one employer, determined 
disregarding the rules of section 414(b) and (c) of the Code); the 
office of the plan or the plan administrator; or the relevant office of 
the primary recordkeeper serving the plan was located in one of the 
disaster areas (as defined in paragraph III.C.(2)) at the time of the 
hurricane.

D. Later Extensions

    The Agencies will continue to monitor the effects of Hurricane 
Maria and may provide additional relief as warranted.

IV. Examples

    The following examples illustrate the timeframe for extensions 
required by this notice. In each example, assume that the individual 
described is directly affected by the hurricane.
    Example 1 (Electing COBRA). (i) Facts. Individual A works for 
Employer X in Puerto Rico and participates in X's group health plan. On 
September 20, 2017, the day Hurricane Maria made landfall, X's business 
is destroyed, and the plan ceases to function. A has no other coverage. 
Employer Y is part of the same controlled group as X and continues to 
operate and sponsor a group health plan. A is provided a COBRA election 
notice on December 1, 2017. What is the deadline for A to elect COBRA?
    (ii) Conclusion. In this Example 1, A is eligible to elect COBRA 
coverage under Employer Y's plan because Employer Y is in the same 
controlled group as Employer X.\4\ The period from September 17, 2017 
through March 16, 2018 is disregarded for purposes of determining A's 
COBRA election period. The last day of A's COBRA election period is 60 
days after March 16, 2018, which is May 15, 2018.
---------------------------------------------------------------------------

    \4\ Under the COBRA rules, the COBRA period continues even after 
the end of the plan, if the employer continues to provide any group 
health plan to any employee. Code section 4980B(f)(2)(B)(ii) and 
ERISA 602(2)(B) . For purposes of COBRA, ``employer'' includes the 
person for whom services are performed and any other person that is 
a member of a group described in Code section 414(b), (c), (m), or 
(o). 26 CFR 54.4980B-2, Q&A 2.
---------------------------------------------------------------------------

    Example 2 (Special enrollment period). (i) Facts. Individual B 
resides in the United States Virgin Islands. B is eligible for, but 
previously declined participation in, her employer-sponsored group 
health plan. On October 31, 2017, B gives birth and would like to 
enroll herself and the child into her employer's plan; however, open 
enrollment does not begin until November 15.
    (ii) Conclusion. In this Example 2, the period from September 16, 
2017 through March 15, 2018 is disregarded for purposes of determining 
B's special enrollment period. B may special enroll herself and her 
child into her employer's plan as early as the date of the child's 
birth, and the last day B may special enroll herself and her child into 
her employer's plan is 30 days after March 15, 2018, which is April 14, 
2018.
    Example 3 (COBRA premium payments). (i) Facts. Individual C resides 
in Puerto Rico. Before the hurricane, C was receiving COBRA 
continuation coverage under a group health plan. More than 45 days had 
passed since C had elected COBRA. Monthly premium payments are due by 
the first of the month. The plan does not permit qualified 
beneficiaries longer than the statutory 30-day grace period for making 
premium payments. C made a timely September payment, but did not make 
an October payment before the hurricane.
    (ii) Conclusion. In this Example 3, the period from September 17, 
2017 through March 16, 2018 is disregarded for purposes of making 
monthly COBRA premium installment payments. Premium payments made by 30 
days after March 16, 2018, which would be April 15, 2018 for October, 
November, and December of 2017, and January, February, and March of 
2018, are timely, and C is entitled to COBRA continuation coverage for 
these months.
    Example 4 (COBRA premium payments). (i) Facts. Same facts as 
Example 3. By April 15, 2018, a payment equal to two months' premium 
has been made for C.
    (ii) Conclusion. C is entitled to COBRA continuation coverage for 
October and November 2017, the two months for which timely premium 
payments were made, and C is not entitled to COBRA continuation 
coverage for any month after November 2017.
    Example 5 (Claims for medical treatment under a group health plan). 
(i) Facts. Individual D resides in the United States Virgin Islands and 
is a participant in a group health plan. On October 1, 2017, D received 
medical treatment for a condition covered under the plan, but a claim 
relating to the medical treatment was not submitted until later. Under 
the plan, claims must be submitted within 365 days of the participant's 
receipt of the medical treatment.
    (ii) Conclusion. For purposes of determining the 365-day period 
applicable to D's claim, the period from October 1, 2017 through March 
15, 2018 is disregarded. Therefore, D's last day to submit a claim is 
365 days after March 15, 2018, which is March 15, 2019.
    Example 6 (Internal appeal). (i) Facts. Individual E resides in 
Puerto Rico. E received a notification of an adverse benefit 
determination from E's disability plan on August 15, 2017. The 
notification advised E that there are 180 days within which to file an 
appeal.
    (ii) Conclusion. When determining the 180-day period within which 
E's appeal must be filed, the period from September 17, 2017 through 
March 16, 2018 is disregarded. Therefore, E's last day to submit an 
appeal is 148 days after March 16, 2018, which is August 11, 2018.

    Signed at Washington, DC, this 17th day of November, 2017.
Jeanne Klinefelter Wilson,
Deputy Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
    Signed this 16th day of November, 2017.
Kirsten Wielobob,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service, Department of the Treasury.
[FR Doc. 2017-25332 Filed 11-21-17; 8:45 am]
 BILLING CODE 4510-29-P