By: HUB’s EB Compliance Team

In response to the impact of Hurricanes Helene and Milton, the Department of Labor released Disaster Relief Notice 2024-01 and both the IRS and DOL issued a joint regulatory notice. The purpose of this relief is to provide certain Employee Retirement Income Security Act (ERISA) and IRS deadline extensions and other relief.

Relief Period

The relief begins on the first day of the incident period and ends on May 1, 2025. FEMA has established different incident periods for different affected areas:

  • Florida - the incident period for Hurricane Helene began on September 23, 2024 and for Hurricane Milton, the incident period began on October 5.
  • North Carolina, South Carolina, and Virginia - the incident period began on September 25, 2024.
  • Georgia - the incident period began September 24.
  • Tennessee - the incident period began on September 26.

In all areas, relief ends on May 1, 2025.

Participant Extensions

The relief for participants and beneficiaries applies to those who resided, lived, or worked in a FEMA-declared disaster area as a result of Tropical Storm Helene, Hurricane Helene, or Hurricane Milton. For group health plans subject to ERISA or the IRS Code, the relief allows additional time for those participants and beneficiaries to comply with certain deadlines affecting COBRA continuation coverage, special enrollment periods, claims for benefits, appeals of denied claims, and external review of certain claims and for plans to provide a COBRA election notice. With regard to disability and other plans, the notice provides additional time for participants and beneficiaries to make claims for benefits and appeal denied claims.

Specifically, plans must disregard the relevant incident period for plan participants, beneficiaries, or claimants directly affected by covered disasters when determining whether they timely perform certain actions relevant to: (a) HIPAA’s special enrollment periods; (b) COBRA’s continuation coverage rules; and (c) the ERISA deadlines for participants and beneficiaries to file benefits claims and appeals (including claims for external review). This is similar to the relief provided during the COVID-19 pandemic, although the relief period is much shorter in duration.

Example – COBRA Deadline: Juan is in outside sales and works for Wisconsin Widgets. While Wisconsin Widgets is headquartered in Madison, Wisconsin, Juan is located in Ashville, NC. Juan’s employment was terminated on September 15, 2024 and his coverage ended on September 30th. Because Wisconsin Widgets HR is in Wisconsin it was able to timely send Juan his COBRA eligibility and enrollment materials. However, on September 27th Juan’s home was destroyed by Hurricane Helene. Juan does not have regular access to postal services or basic community infrastructure. As a result, he will not be able to return his COBRA election forms until the next time he is in a town with postal services which will not be until early February. Juan will not make his 60-day deadline to elect COBRA under the standard COBRA timeline. However, because of the disaster relief Juan will have until sixty days after May 1, 2025 (or until June 30, 2025) to return his COBRA election forms.

The guiding principle for plans and plan fiduciaries must be to act reasonably, prudently, and in the interest of the covered workers and their families. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments in such cases and should attempt to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.

Employer Extensions

Employers with plans in the directly affected by the storms will not be in violation of ERISA for a failure to timely furnish a notice, disclosure, or document so long as the document is provided as soon as practicable on or after first day of the incident period and by no later than May 1, 2025. A plan is considered directly affected by the storms if any of the following is located in one of the disaster areas at the time of the applicable storm:

  • the principal place of business of the employer that maintains the plan,
  • the principal place of business of employers that employ more than 50% of the active participants covered by the plan,
  • the office of the plan or the plan administrator, or
  • the office of the primary recordkeeper serving the plan.

Employers must work in good faith to ensure the documents and materials are delivered to their employees and plan beneficiaries as soon as practicable. The DOL explains that good faith acts include 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.

Example – Employer Deadline: Sally-Sue participates in Florida Trucking Company’s group health plan. On November 10, 2024 Sally-Sue resigned her employment. Sally-Sue’s group health plan coverage ended on November 30th. Florida Trucking works with a COBRA administrator therefore, her COBRA eligibility materials must be delivered to her by not later than January 13, 2025. However, under this disaster relief Florida Trucking has until May 1, 2025 to deliver Sally-Sue’s COBRA eligibility materials to her so long as it engages in good faith efforts to deliver the materials to her as soon as administratively practicable, which may be earlier than May 1.

Likewise, HHS encourages non-Federal governmental plans and health insurance issuers offering group or individual health insurance coverage to extend otherwise applicable timeframes for participants, beneficiaries, and enrollees affected by the storms in a manner consistent with the specified relief.

The IRS also gave affected taxpayers until May 1, 2025, to perform time-sensitive actions. The relief includes the filing of Form 5500 that were required to be filed on or after Sept. 23, 2024, and before May 1, 2025, are postponed through May 1, 2025. Form M-1 filings are also included in the deadline extension through May 1, 2025. The postponement of time to file and pay does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series. More information on these extensions is available at this IRS website.

In addition, the DOL acknowledges 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. As is typical in these scenarios, the DOL’s 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.

Takeaways

Employers and plans in the affected areas, or with participants and beneficiaries in the affected areas, should familiarize themselves with the guidance and may want to consider communicating the extensions to affected individuals. As part of the overall guidance package, the DOL also issued helpful FAQs for participants and beneficiaries affected by the storms, which may prove a good starting point for any communications. Employers and plans may also need to work with their service providers to determine what relief they can provide and what systems adjustments may need to be made to accommodate requests that are timely under this extension.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Later developments may result in this information becoming outdated or incorrect, and Hub International is not obliged to update it. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.