On Feb. 26, 2021, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued Disaster Relief Notice 2021-01 to provide guidance on the duration of the COVID-19-related relief regarding certain employee benefit plan deadlines during the Outbreak Period.
The relief requires employers to disregard the Outbreak Period when enforcing certain employee benefit plan deadlines and gives plan sponsors additional time to distribute plan notices and disclosures. Under federal law, this period cannot exceed one year. Because the Outbreak Period began on March 1, 2020, the relief was expected to expire on Feb. 28, 2021. However, this guidance allows the relief to extend beyond this date in some situations.
The DOL Notice interprets the one-year limit on the relief related to the Outbreak Period to begin on the date the action would otherwise have been required in a given situation. Specifically, individuals and plans will have the applicable periods disregarded until the earlier of:
On the applicable date, the time frames for individuals and plans with periods that were previously disregarded will resume. In no case will a disregarded period exceed one year.
The Notice provides the following examples to illustrate EBSA’s guidance on the duration of the relief:
In all of these examples, the delay for actions required or permitted that is provided by the Notices does not exceed one year.
The DOL recognizes that plan participants and beneficiaries may continue to encounter problems when the relief described above is no longer available, due to the one-year limit. Accordingly, plan fiduciaries should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits in these cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames.
The DOL also acknowledges that full and timely compliance with ERISA’s disclosure and claims processing requirements by plans and service providers may not always be possible. In the case of fiduciaries that have acted in good faith and with reasonable diligence under the circumstances, the DOL’s approach to enforcement will be marked by an emphasis on compliance assistance, and includes grace periods and other relief.
This article is for educational purposes only. The tax and legal references attached herein are designed to provide accurate and authoritative information with regard to the subject matter covered and are provided with the understanding that LoVasco Consulting Group is not engaged in rendering tax or legal services. If tax or legal advice is required, you should consult your accountant or attorney. LoVasco Consulting Group does not replace those advisors.
Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a registered broker dealer and Investment Advisor, member FINRA / SIPC. LoVasco Consulting Group is independently owned and operated.
Return to Insights Page
LoVasco Consulting Group and their agents are presently licensed to sell traditional life insurance in Michigan as a resident producer and numerous other states as a nonresident producer. This site is not intended as an offer to sell securities, which may be done only after proper delivery of a prospectus and a client suitability review. Proper state registration is mandatory prior to conducting business in any state. Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a registered broker dealer and Investment Advisor, member FINRA / SIPC. Check the background of this Firm and/or investment professional on FINRA's BrokerCheck. LoVasco Consulting Group is owned and operated independently from M Holdings Securities, Inc. LoVasco Consulting Group is a member of M Financial Group. Please click here for further details regarding this relationship.