DOL Issues Employee Benefit Plan Guidance to Provide Pandemic Relief

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) on Tuesday, April 28, 2020 issued deadline relief and other guidance for employee benefit plans. The EBSA Disaster Relief Notice 2020-01 outlines the changes for Employee Benefit Plans (EBP) due to the COVID-19 pandemic.

The DOL recognizes that the pandemic may temporarily affect an organization’s ability to comply with various requirements and deadlines under the Employee Retirement Income Security Act (ERISA) and is giving organizations some relief.

The effective date of this guidance is March 1^st, when the COVID-19 National Emergency was declared, and will continue for 60 days after the emergency is declared over, unless the DOL announces a different date later.  As outlined by the notice, an employee benefit plan and those administrating it will not be in violation of ERISA Section 518 for failing to furnish notices, disclosures or documents during this time period if they acted in good faith. That includes using electronic means of communicating with plan participants and beneficiaries, including email, text messages and through websites.

Plan Loans and Distributions

The EBSA Disaster Relief Notice states that if an employee pension benefit plan fails to follow loan or distribution requirements, the Department will not treat it as a failure if:

• that failure is solely attributable to the pandemic;
• the plan administrator makes a good-faith diligent effort under the circumstances to comply with those requirements; and
• the plan administrator makes a reasonable attempt to correct any procedural deficiencies, such as assembling any missing documentation, as soon as is practical.

Plan Loan Repayments and Contributions

If an organization fails to forward plan payments or contributions, the DOL will not enforce penalties as long as it can be proven that the delay was temporary and caused by the pandemic. Employers and service providers “must act reasonably, prudently and in the interest of employees to comply as soon as administratively practicable under the circumstances,” according to the notice.

The EBSA Disaster Relief Notice also states that the DOL, Treasury Department and IRS will soon publish a separate joint notice in the Federal Register to announce an extension for a number of deadlines. This will give plan participants, beneficiaries and employers additional time to make critical health coverage and other decisions affecting benefits during the pandemic. This includes complying with certain deadlines affecting COBRA continuation coverage, special enrollment periods, claims for benefits, appeals of denied claims and external review of certain claims. Participants and beneficiaries will also have more time to make claims for benefits and appeal denied claims, thus preventing a loss of or lapse in group health coverage or the denial of a valid claim for benefits.

If you have questions on the guidance and relief issued by the DOL, please contact Lori Wagnon or another member of our Employee Benefit Plan team by completing the form below.