DOL Issues COVID-19 Relief from ERISA Deadlines for Plans and Participants
May 6, 2020
The Department of Labor (DOL) has provided relief from certain deadlines under ERISA “to help employee benefit plans, plan participants and beneficiaries, employers and other plan sponsors, plan fiduciaries, and other service providers impacted by the coronavirus outbreak.”
The relief is outlined in a package of documents that includes a joint notice issued by DOL, the Department of the Treasury, and the Internal Revenue Service; a relief notice issued by DOL’s Employee Benefits Security Administration (EBSA); and FAQs published by EBSA.
The relief in the notices supplements other guidance provided by DOL and the IRS in connection with COVID-19. The notices are effective immediately upon publication.
Joint Notice: DOL, Treasury, and the IRS issued a notice that extends certain timeframes under ERISA and the Internal Revenue Code for group health plans, disability and other welfare plans, pension plans, and their participants and beneficiaries. The relief for employee pension benefit plan participants and beneficiaries provides that, in determining the period for those parties to make claims for benefits or appeal denied claims, plans must disregard the period from March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or other date announced by the agencies in a future notice (“Outbreak Period”).
EBSA Disaster Relief Notice 2020-01: EBSA issued separate “Guidance and Relief for Employee Benefit Plans Due to the COVID-19 (Novel Coronavirus) Outbreak,” which applies during the Outbreak Period. It describes the relief provided in the Joint Notice and grants a separate extension of deadlines for providing required notices or disclosures to plan participants, beneficiaries, and other persons, except for the notices and disclosures described in the Joint Notice.
A plan and plan fiduciary will not be in violation of ERISA for failing to furnish a notice, disclosure, or document that must be furnished during the Outbreak Period if the plan and fiduciary “act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances. Good faith acts include use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages, and continuous access websites.” This relief also applies to blackout notices.
Plan Loans and Distributions and the CARES Act: The notice provides relief from some procedural requirements for plan loans or distributions that are within DOL’s authority if certain requirements are satisfied. Guidance is also provided regarding participant loans and delayed loan repayments permitted under the CARES Act, and related plan amendments.
Participant Contributions and Loan Repayments: DOL will not, solely on the basis of a failure attributable to COVID-19, take enforcement action with respect to a temporary delay in forwarding participant payments or contributions to a plan, stating that “[e]mployers and service providers must act reasonably, prudently, and in the interest of employees to comply as soon as administratively practicable under the circumstances.”
General ERISA Fiduciary Compliance Guidance: EBSA concluded the notice by stating that plan fiduciaries should “make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments.” Recognizing that there may be times “when plans and service providers may be unable to achieve full and timely compliance with claims processing and other ERISA requirements,” DOL’s approach to enforcement “will emphasize compliance assistance and include grace periods and other relief where appropriate.”
COVID-19 FAQs for Participants and Beneficiaries: Finally, EBSA issued FAQs to help plan participants, beneficiaries, sponsors, and employers understand their rights and responsibilities under ERISA. Many of the FAQs relate to health benefits. For retirement benefits, the FAQs discuss the parties that participants should contact regarding their questions on different issues. With respect to quarterly statements, the FAQ states that, under EBSA Disaster Relief Notice 2020-01, a delay in furnishing a statement during the Outbreak Period “will not violate Federal law if the plan administrator acts in good faith and furnishes your benefit statement as soon as administratively practicable under the circumstances.”
TAGS: DOL, Coronavirus, COVID-19, SBA, ERISA, Retirement Plans