Department of Labor Updates in the U.S.

DOL COVID-19 Outbreak PeriodDOL COVID-19 Outbreak Period Set to End on February 28th

In early 2020, the Department of Labor (DOL) issued mandatory deadline relief and other guidance under the Employee Retirement Income Security Act (ERISA) to help plan participants and beneficiaries impacted by the COVID-19 outbreak. This relief extended certain time frames by which participants had to provide a plan notice under HIPAA and COBRA, as well as extending certain claims and appeals deadlines. These extensions were effective beginning March 1, 2020 and, unless further extended by the DOL, will end on February 28, 2021 (the “Outbreak Period”). For more information on these mandatory DOL deadline extensions see Alert 2020-13.

If the DOL does not extend the Outbreak Period, then as of March 1, 2021, the deadlines will no longer be suspended. At that point, participants will have 60-days to provide the relevant notice to the plan. The end of the Outbreak Period could create significant implications for participants and plan sponsors as it relates to COBRA elections, HIPAA special enrollments, and claims and appeals.  For example, if a participant became eligible for COBRA continuation coverage on February 1, 2020, the 60-day period for electing such coverage, which would have ended on March 31, 2020, will now end on April 30, 2021 (60 days after the end of February 28, 2021). Plan administrators and TPAs should prepare to notify plan participants of the expiration of the Outbreak Period and update all communications, assuming there is no extension. We will continue to monitor this issue closely and provide regular updates.

2021 Adjusted Civil Monetary Penalties for DOL Violations

The U.S. Department of Labor (DOL) announced the 2021 annual adjustments to the civil monetary penalties for a wide range of benefit-related violations. The 2021 adjustments (inflation increase is 1.182%) are effective for penalties assessed after January 15, 2021, with respect to violations occurring after November 2, 2015. Here are the highlights:

  • Form 5500. The maximum penalty for failing to file Form 5500 increases from $2,233 to $2,259 per day that the filing is late.
  • Summary of Benefits and Coverage (SBC).The maximum penalty for failing to provide the SBC increases from $1,176 to $1,190 per failure.
  • Other Group Health Plan Penalties. Violations of the Genetic Information Nondiscrimination Act (GINA), such as establishing eligibility rules based on genetic information or requesting genetic information for underwriting purposes, and failures relating to disclosures regarding the availability of Medicaid or children’s health insurance program (CHIP) assistance, may result in penalties of $120 per participant per day, up from $119.
  • Multiple Employer Welfare Arrangement (MEWA) Filing. Penalties for failure to meet applicable filing requirements, which include annual Form M-1 filings and filings upon origination, increase from $1,625 to $1,644 per day.
  • Failure to provide plan documents to DOL within 30 days after request. Penalties are $161 (up from $159) for every day late (not to exceed $1,613 per request).

Revisiting Rules on the Lookback Method for Determining ACA Full-time Status

The look-back measurement method allows employers to average an employee’s hours over a period of time to determine full-time status under the Affordable Care Act (ACA). The period during which an employee’s hours are measured is called a standard measurement period. The average hours worked during a standard measurement period will generally fix an employee’s status as either full-time or part-time for a corresponding stability period. An administrative window of no more than 90 days can separate a standard measurement period and standard stability period. In administering the look-back method, the Final Pay or Play Regulations provide that employers can select a standard measurement period of between 3 and 12 months. However, that flexibility is eliminated by other look-back method rules. Those rules require a stability period to be at least 6 months and provide that it cannot be shorter than the standard measurement period. Also, if the look-back method determines part-time status (as opposed to only finding employees are full-time), the standard measurement period cannot be shorter than the stability period. This means that the only options an employer has are to: (1) implement two six-month measurement periods and corresponding six-month stability periods (covering a 12 month plan year), or (2) use a 12 month look-back period that corresponds with a 12 month stability period that matches the employer’s plan year. Employers cannot use a 3-month measurement period. Because of these restrictions, most plans use a 12 month look-back period that corresponds with a 12 month stability period that matches the employer’s plan year. Given how important full-time status is under the ACA’s Pay or Play mandate it is important to revisit these rules and make any adjustments necessary to stay within this regulatory safe harbor.


This article about the DOL COVID-19 Outbreak Period in the U.S. is provided by Alliant, Asinta’s employee benefits consulting Partner in the country.