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Expanding E-delivery, Deadlines, EBSA Announces Filing Relief

Government Affairs

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) has issued “deadline relief and other guidance” related to the impact of the Coronavirus outbreak—including expanded “good faith” application of electronic delivery.

EBSA Disaster Relief Notice 2020-01 extends the time for plan officials to furnish benefit statements, annual funding notices, and other notices and disclosures required by ERISA “so long as they make a good faith effort to furnish the documents as soon as administratively practicable.”

Significantly, the notice explains that good faith includes the 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.

The notice also includes compliance assistance guidance on plan loans, participant contributions and loan payments, blackout notices, Form 5500 and Form M-1 filing relief, and “other general compliance guidance on ERISA fiduciary responsibilities.”

Loan Administration

With regard to verification procedures, the notice states that, “if an employee pension benefit plan fails to follow procedural requirements for plan loans or distributions imposed by the terms of the plan,” the department will not treat it as a failure if:

  • “that failure is solely attributable to the COVID-19 outbreak;
  • “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 administratively practicable.”

Note that this relief is “limited to verification requirements required under provisions of Title I of ERISA that are within the interpretive and regulatory authority of the Department”—and does not include spousal consent or other statutory or regulatory requirements under the jurisdiction of the Treasury Department/IRS.

Contribution Timing

Acknowledging that some employers and service providers may not be able to forward participant payments and withholdings to employee pension benefit plans within prescribed timeframes “during the period beginning on March 1, 2020, and ending on the 60th day following the announced end of the National Emergency,” the DOL says it will not “solely on the basis of a failure attributable to the COVID-19 outbreak” take enforcement action with respect to a “temporary delay in forwarding such payments or contributions to the plan.” However, the notice cautions that employers and service providers “must act reasonably, prudently, and in the interest of employees to comply as soon as administratively practicable under the circumstances.”

Compliance Approach

Noting that “there may be instances when plans and service providers may be unable to achieve full and timely compliance with claims processing and other ERISA requirements,” the DOL says that its approach to enforcement will “emphasize compliance assistance and include grace periods and other relief where appropriate, including when physical disruption to a plan or service provider’s principal place of business makes compliance with pre-established timeframes for certain claims decisions or disclosures impossible.”

FAQs

The DOL also issued a set of frequently asked questions on health benefit and retirement benefit issues to help employee benefit plan participants and beneficiaries, plan sponsors, and employers impacted by the coronavirus outbreak understand their rights and responsibilities under ERISA. The 23 questions are split roughly 50/50 between health and retirement issues.

A Department of Labor notice, jointly issued with the Department of the Treasury and IRS, extends certain time frames affecting participants’ rights to health care coverage, portability, and continuation of group health plan coverage under COBRA, and extends the time for plan participants to file or perfect benefit claims or appeals of denied claims. These extensions provide participants and beneficiaries of employee benefit plans additional time to make important health coverage and other decisions affecting their benefits during the Coronavirus outbreak. The joint notice is posted on EBSA’s website and will be published in an upcoming edition of the Federal Register.

More to come…we hope.

All comments
Debra Combs
3 years 11 months ago
Could you please include a link to the DOL FAQ? Thank you for the very timely information!