DOL EXTENDS ERISA CLAIM FILING DEADLINES
On May 4, 2020, the Department of Labor issued a Final Rule that extends certain timeframes for ERISA plan participants in response to the COVID-19 pandemic. The rule became effective on April 30, 2020.
THE NEW FINAL RULE
The President declared a National Emergency on March 1, 2020 related to COVID-19 that (at this time) is still ongoing. The Final Rule specifies that a plan participant’s normal timeframe for filing an initial benefit claim or appeal must be suspended as of March 1, 2020 and cannot resume until 60 days after the President declares that the COVID-19 National Emergency has ended.
The applicability of the Employee Retirement Income Security Act (“ERISA”) to a Texas Injury Benefit Plan is clear. But even traditional medical and other employee benefit plans are struggling to interpret and implement this new rule. We provide this initial guidance in good faith, using the information available to us at this time.
APPLICATION TO TEXAS INJURY BENEFIT PLANS
The Final Rule involves two key timeframes that impact Texas Injury Benefit Plans:
- The date that a plan participant may file an initial benefit claim; and
- The date that a plan participant may file an appeal for a denied benefit claim.
IMPACT ON FILING INITIAL BENEFIT CLAIMS
When is an “initial benefit claim” filed under a Texas Injury Benefit Plan? Is it when an employee reports a work-related event or is it when the employee obtains medical care under the Plan? ERISA defines a “claim” as a request for a plan benefit. Under a PartnerSource-drafted Texas Injury Benefit Plan, a reported work-injury event remains in an “incident only” status until the employee submits to medical treatment by an approved provider under the plan. Accordingly, we believe an incident converts to an “initial benefit claim” when the employee receives medical care and incurs that first medical charge from an approved provider under the plan.
Most of our clients’ plans also require the first covered medical charge to be incurred for treatment with an approved provider within a specific amount of time (for example, 14 days from the date of injury). Therefore, the new DOL Rule SHOULD APPLY to any initial medical treatment timeframe that your plan may have for incurrence of the first medical charge. Similarly, this new DOL Rule SHOULD APPLY to any other rule that your plan may have related to ongoing medical treatment (for example, a requirement that an injured employee must not have more than a 60-day gap between ongoing medical treatments with approved medical providers).
EXAMPLE: An injured employee reports an incident on May 1, 2020 (the day after the new DOL rule became effective). The plan requires the injured employee to submit to medical treatment from an approved provider within 14 days from the date of the injury. If the President ends the National Emergency on July 1, 2020, then the injured employee may have until September 15, 2020 (that is, July 1, 2020, plus 60 days after the National Emergency ends, plus another 14 days due to the plan provision) to submit to initial medical treatment under the plan.
EXAMPLE: An injured employee is released from care on May 12, 2020. Under the terms of the plan, the injured employee must seek medical treatment within 60 days of the last visit in order to continue benefits. If the President ends the National Emergency on July 1, 2020, then the injured employee would have until October 30, 2020 (that is, July 1, 2020, plus 60 days after the National Emergency ends, plus another 60 days due to the plan provision) to seek ongoing medical care.
IMPACT ON FILING APPEALS
The new DOL Rule WILL APPLY to appeal timeframes, but will apply differently depending upon when an affected plan participant received a benefit claim denial:
- For a benefit claim denial issued before March 1, 2020, the plan participant’s timeframe for filing an appeal should be suspended beginning March 1, 2020 and would not resume again until 60 days after the end of the National Emergency period.EXAMPLE: An injured employee gets a medical benefit denial on December 1, 2019. The employee normally has 180 days from the denial date in order to file an appeal. On March 1, 2020 (90 days after the denial), the employee’s appeal timeframe is suspended. The President then ends the National Emergency on July 1, 2020. On September 1, 2020 (60 days after the National Emergency ending), the employee would still have another 90 days to file an appeal.
- For a benefit claim denial issued after March 1, 2020, the appeal filing timeframe would be automatically suspended. As a result, a 180-day timeframe for filing an appeal would not start until 60 days after the end of the National Emergency period.
EXAMPLE: An injured employee gets a wage replacement (disability) benefit denial on April 1, 2020. The employee normally has 180 days from the denial date in order to file an appeal. The President then ends the National Emergency on July 1, 2020. On September 1, 2020 (60 days after the National Emergency ending) the employee would still have a full 180 additional days to file an appeal.
IMPACT ON INJURY REPORTING TIMEFRAME
Our clients’ plans contain fair, well-communicated injury reporting timeframes, requiring employees to provide notice of a work-related event (for example, 24 hours after the work incident). These requirements are in the best interests of employees and their co-workers because they lead to better medical outcomes and promote workplace safety, among other benefits. The proposed new rule does not refer to injury reporting deadlines and thus, on its face, does not appear to apply to these timeframes.
Moreover, we understand the rule to be motivated by the concern that individuals may not be able to timely access benefits given the circumstances created by the pandemic. This concern does not apply to injury reporting. If an employee experiences a work-related injury during the National Emergency, the employee is, by definition, working for the employer and thus likely in communication with the employer. Accordingly, the National Emergency is likely not preventing the employee from providing verbal or written notice of the event to the employer.
We therefore conclude that neither the language of the rule nor the intent behind the rule suggest that it will apply to the reporting timeframe, and therefore the extension SHOULD NOT APPLY to your plan’s initial reporting timeframe. Keep in mind, however, that there may be special circumstances that warrant a “good cause” exception for initial injury reporting, either due to the National Emergency or due to other circumstances that affect the employee’s ability to report the injury or seek medical care. The Plan Administrator should (as a fiduciary, in the best interests of the injured employee) always conduct a “good cause” analysis for late reporting.
IMPACT ON OTHER PLAN COMPLIANCE PROVISIONS
The new DOL Rule SHOULD NOT AFFECT your ability to continue enforcing noncompliance rules in your plan (for example, multiple missed medical appointments). Remember, again, your plan should include “good cause exceptions” for any employee compliance requirement. As a fiduciary, you must continue to conduct and document a good cause analysis when applying these plan requirements. And your PartnerSource team remains available to consult on your decision in any situation that may implicate these new time-based DOL rules.
Unanswered questions remain, including (1) what action, if any, a plan sponsor must take to notify its employees of the extended deadlines and (2) whether and how to retroactively apply the extended deadlines to claims made prior to the release and implementation of the new rule.
Final interpretation of your injury benefit plan is a fiduciary duty of the Plan Administrator. Different results may also apply under injury benefit plans not prepared by PartnerSource or that do not include the sample provisions discussed above.
For now, PartnerSource recommends a Plan Administrator of a Texas Injury Benefit Plan:
- Review and suspend relevant time-based provisions in your Client Service Instructions and Appeal Procedures,
- Update template letters used for issuing benefit denials,
- Adjust claim audit processes,
- Document in claim files the good faith efforts to comply, reasons for any delays, and the analysis for finding or failing to find good cause, and
- Talk to your PartnerSource Team Leader or Director regarding any claims denied after April 30, 2020 for the 14 or 60 day (or similar) rules. If you have questions and are not a current client of PartnerSource, please contact PartnerSource President, Jennifer Hurless at 214-335-2178 or email@example.com.
Your PartnerSource team anticipates additional guidance in the coming weeks. We will continue to monitor this and other topics related to Texas injury benefit plans. Thank you.