COVID-19 Plan Changes: Five Simple Steps

To help you review, evaluate, implement and communicate both the mandatory and optional plan changes issued by the Department of Labor and Department of Treasury for COBRA and FSA/HRA deadlines, we have outlined Five Simple Steps below.

If you already know which Optional plan changes you would like to implement, you can simply fill out the COVID-19 Optional Plan Changes Form.

five steps to review and implement Plan Changes

 

STEP ONE: Review the Mandatory Plan Changes

We will automatically implement these changes for you, and we have already re-processed any healthcare FSA/HRA claims that were denied for being submitted after the end of the plan’s runout period.

If you are a government entity, church or church-affiliated these mandatory rules may not apply. Please consult your legal/compliance team and provide direction to your Clarity Client Relationship Manager.

 

The changes described below are based on the length of the “Outbreak Period.” The Outbreak Period is defined as the period of time starting on March 1, 2020, and ending 60 days after the end of the National Emergency (unless a different end date to the Outbreak Period is announced by the DOL and IRS).

  • Health Care FSA and HRA: Runout Extended – Any Health Care FSA or HRA plan which had a runout ending on or after March 1, 2020 will now allow participants additional time to submit claims for expenses incurred in the prior plan year. The runout will extend until the end of the Outbreak Period plus time from March 1 through end of the plans original runout end date. Clarity will automatically re-process any claims previously denied for being submitted after the end of the plan’s runout period.
  • Health Care FSA and HRA: Appeal Deadlines Extended – For Health Care FSAs and HRAs, the Outbreak Period must be disregarded for purposes of the plan’s deadline to file an appeal a denied claim and, if applicable, certain deadlines related to external reviews.
  • ICHRA and Other HRAs with Premium Reimbursement Timing Modification – If you offer an ICHRA or other HRA that reimburses individual insurance premiums, the new rules provide timing changes for when you can reimburse premium payments, in most instance at the start or before the coverage period begins. Clarity will be processing reimbursement requests for insurance premiums accordingly.
  • HIPAA Special Enrollment Extension – Group health plans that must provide employees and their dependents at least a 30-day period (sometimes 60-days) to make mid-year enrollment changes due to a qualified life event under the HIPAA special enrollment rules, must disregard the Outbreak Period when applying these timeframes. While this is a mandatory change, we will contact our impacted clients directly with their system options.
  • COBRA Election Deadline Extension – The Joint Rule extends the 60-day COBRA election period by disregarding any days in the Outbreak Period thus extending the time an employee and/or their dependent has to elect COBRA continuation coverage after experiencing a COBRA qualifying event and a loss of group health plan coverage during the Outbreak Period, or, in some cases, prior to the start of the Outbreak Period or, in some cases, prior to the start of the Outbreak Period. A supplemental notice has been sent to all pending and active COBRA participants informing them of this change. A supplemental letter will also be included with the election notice for any future Qualified Beneficiaries. Additionally, on or about June 11th, functionality will be updated in our COBRA portal to allow for the extension of the election period for the duration of the Outbreak Period.
  • COBRA Premium Payment Period Extension – Under COBRA rules, after COBRA coverage has been elected, a participant has 45 days to make their initial COBRA premium payment. Subsequent COBRA payments must be made within the 30-day grace period. The Joint Notice extends these payment timeframes, as applicable, by disregarding the Outbreak Period. A supplemental notice has been sent to all active COBRA participants informing them of these changes. A supplemental letter will also be included with the election notice for any future Qualified Beneficiaries. Additionally, on or about June 11th, functionality will be updated in our COBRA portal to allow for the extension of the payment periods for the duration of the Outbreak Period.

STEP TWO: Review the Optional Plan Changes

For these optional plan changes, please let us know which changes you would like Clarity to implement on your behalf by completing the COVID-19 Optional Plan Changes Form.

In rare circumstances, your current plan design may conflict with the desired changes you choose. If this occurs, we will contact you to discuss your options.

  • Extend Claims Runout Deadline for Dependent Care FSA (DCA) – Plans can apply the claims runout period extension for DCAs, similar to the mandated rule for Health Care FSAs. If selected, Clarity will reprocess any expenses previously denied for being submitted after the end of the plan runout period. The DCA runout extension is not tied to the Outbreak Period as in the case of the Health Care FSA and employers can determine the deadline on or before 12/31/2020.
  • Extend Existing Grace Period Ending After January 1, 2020 – Plans can extend existing grace period to 12/31/20 (or earlier) to allow claims incurred through the new extension date to be paid from the prior plan year balance.
  • Add Extended Grace Period – You are now able to adopt an extended grace period for non-calendar plan years ending in 2020 to allow claims incurred through the new grace period through December 31, 2020 to be paid from the prior plan year balance. Plans with the carryover provision ($500 carryover), can add the grace period extension.
  • Carryover Feature: Increased Limit – Plans that have an existing $500 carryover provision, for plan years starting on or after January 1, 2020 the new carryover maximum has been increased to $550. Clarity will make this change for you unless you direct us otherwise in the Plan Change Form.
  • Election Changes: Increased Flexibility to Health Care and Dependent Care FSAs – Guidance provides for temporary relief as it relates to mid-plan year elections, election changes (increase/decrease) and revoking elections during the 2020 calendar year. It is important to note that decreasing or revoking election changes to Health Care FSAs may have a financial impact to the plan.

For more details on all these plan changes – watch our recent webinar.


STEP THREE: Consider which Optional Changes are Best for your Organization

Run a 2019 and 2020 Enrollee Account Balance Report through your Clarity Benefit Administration Portal. This report will allow you to review your employees' current and prior year balances, contributions and reimbursements in order to evaluate the potential financial impact to your company and your employees.

  • Watch the Video below to learn how to run an Enrollee Account Balance Report.
 
Things to Consider
  • Your company's culture, financial situation and resources available to support/communicate changes.
  • Your employees health, any added financial burdens and personal situations such as daycare closings, unemployed spouse due to the pandemic, illness resulting in higher than usual medical bills, etc.

STEP FOUR: Complete the COVID-19 Optional Plan Changes FoRm
 

complete the form
  • Click here to access the COVID-19 Optional Plan Changes Form.
  • Enter your Employer ID.
    Your Employer ID starts with "BEN" and it was included in the email you received. If you need help locating your Employer ID, please contact your Client Relationship Manager or call us at 888-423-6359.
  • Let us know which optional plan changes you would like Clarity to implement.

Once submitted, the requested changes will be reviewed and made within 2-4 business days.


STEP FIVE: Communicate the changes to your employees

  • Inform your employees of the mandatory changes and the optional changes you have chosen to implement. See Sample Letter.
  • Let your employees know they will be receiving reimbursements for denied claims submitted after the runout period. See Sample Letter.

Please wait to send communications until after you have received confirmation from Clarity that the requested changes have been implemented.


What Will Clarity Do Next?

  1. Automatically implement the mandatory changes
  2. Update your plans based on your completed COVID-19 Plan Changes Form
  3. Answer your employees’ questions
  4. Provide an Amendment to the Plan Document (Amendment) and Summary of Material Modification (SMM)
  5. Process your employees’ claims according to new plan rules

Once the necessary changes have been made a fee of $125, for the updated Amendment and SMM, will be included on your invoice.

If you need further explanation of these options or require assistance with anything regarding operation of your plan(s), please contact your Client Relationship Manager or call us at 888-423-6359, and we will connect you with someone who can help you.