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As a result of Hurricane Katrina, a number of
participants and beneficiaries covered by group health plans, disability or
other welfare plans, and pension plans may encounter problems in exercising
their health coverage portability or continuation coverage rights, or in filing
or perfecting their benefit claims. Similarly, employers in affected areas may
face difficulties in fulfilling their notice obligations to participants and
beneficiaries. Recognizing the numerous challenges already facing affected
participants and beneficiaries and plan sponsors, the Employee Benefits
Security Administration (EBSA) and the Internal Revenue Service (IRS) are
taking steps to minimize the possibility of individuals losing benefits because
of a failure to comply with certain pre-established time frames.
For participants, beneficiaries, and plans in the
disaster areas (the counties and parishes in Louisiana, Mississippi or Alabama
that have been or are later designated as disaster areas eligible for
Individual Assistance by the Federal Emergency Management Agency because of the
devastation caused by Hurricane Katrina), the time frames for the following
provisions are tolled for the period between August 29, 2005 and February 28,
2006. The effect is to freeze the application of the time periods through
February 28, 2006.
Extended Time Frames
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The Health Insurance
Portability and Accountability Act (HIPAA) provides portability of group health
coverage by, among other things, giving people credit for prior health
coverage. Under the general HIPAA rules, prior credit may be disregarded if a
person goes without coverage for 63 days. Under the agencies' relief, this time
period has been extended to allow Katrina victims more time to secure health
coverage without losing coverage for preexisting health
conditions.
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HIPAA also requires special
enrollment rights upon certain events, such as loss of other coverage, but only
if an individual requests enrollment within 30 days of the loss. Relief has
also been provided to allow Katrina victims more time to request enrollment in
other group health coverage.
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The Consolidated Omnibus Budget
Reconciliation Act (COBRA) permits qualified beneficiaries who lose coverage
under a group health plan to elect continuation health coverage. The general
COBRA rules allow 60 days to request COBRA coverage. This time frame has also
been extended to give Katrina victims more time to request continuation
coverage.
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The COBRA rules also govern
timing of premium payments. A grace period has been added to give victims more
time to make their COBRA payments.
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The benefit claim procedure
rules require employee benefit plans to establish and maintain reasonable
procedures for the determination and appeal of benefit claims. EBSA is
requiring plans to extend time frames for affected individuals to file a
benefit claim and to file an appeal.
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Plans must provide certain
notices in connection with the HIPAA portability and COBRA continuation
provisions within certain time frames. The agencies are extending these time
frames for plans that cannot make their disclosures on time due to the
hurricane.
The complete notice will be published in the
October 12, 2005 Federal Register. Other Hurricane Katrina disaster relief can
be accessed on the Internet at www.dol.gov and www.irs.gov. |
