DOL FAQs Address Hurricane Sandy Benefits Issues | Practical Law

DOL FAQs Address Hurricane Sandy Benefits Issues | Practical Law

The Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) has issued FAQs providing guidance for Hurricane Sandy-impacted participants and beneficiaries in health and welfare plans. The FAQs also address retirement plan issues.

DOL FAQs Address Hurricane Sandy Benefits Issues

Practical Law Legal Update 3-523-9655 (Approx. 4 pages)

DOL FAQs Address Hurricane Sandy Benefits Issues

by PLC Employee Benefits & Executive Compensation
Published on 04 Feb 2013USA (National/Federal)
The Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) has issued FAQs providing guidance for Hurricane Sandy-impacted participants and beneficiaries in health and welfare plans. The FAQs also address retirement plan issues.
The DOL's Employee Benefits Security Administration (EBSA) issued FAQs providing guidance for Hurricane Sandy-impacted participants and beneficiaries in health and welfare plans. The FAQs, which are dated January 2013, provide guidance on various health and welfare plan issues, including:
  • Obtaining HIPAA Certificates of Creditable Coverage. If a participant does not receive a HIPAA certificate of creditable coverage from a plan by the time it is needed, the participant may demonstrate to a new plan or insurer that he has creditable coverage by:
    • attesting to the period of creditable coverage;
    • producing supporting evidence (for example, a pay stub reflecting health insurance deductions, an explanation of benefits form or a doctor's verification); and
    • cooperating with an attempt to verify prior health coverage.
  • Special Enrollment Option. Individuals who lose coverage as a result of Hurricane Sandy may be able to request special enrollment in another group health plan (for example, under a spouse's plan), which must be requested within 30 days of losing eligibility for other coverage.
  • Domestic Partner Benefits and COBRA. The guidance includes several FAQs involving COBRA coverage in the context of domestic partner benefits:
    • The FAQs address whether an employee who failed to elect available domestic partner coverage for the individual's domestic partner before being laid off can elect COBRA coverage for the individual and the individual's domestic partner. According to the FAQ, whether COBRA coverage can be obtained for the domestic partner in this situation depends on how often the plan allows active employees to add domestic partners.
    • Another FAQ addresses an individual and domestic partner who lost eligibility for plan coverage after the individual was laid off. The FAQ indicates that the individual should be able to elect COBRA coverage for the individual and domestic partner, assuming the plan is subject to COBRA. The domestic partner may also be eligible for special enrollment under the domestic partner's plan.
  • Retiree Health Benefits. An FAQ addresses whether retiree health benefits provided by an employer who was impacted by Hurricane Sandy can be terminated or changed. The FAQ indicates that an employer is generally free, as a matter of federal law, to cut or eliminate retiree health benefits, unless the employer made a specific legally binding promise to maintain the benefits.
  • Employer's Failure to Pay Premiums. In the case of an employer that fails to pay insurance premiums, a participant:
    • should contact the employer to determine whether it intends to pay the premiums;
    • may choose to contact the plan's insurer to determine how long the premiums have been unpaid, whether the insurer provides a grace period for late payment and how long the employer has been given to make the payment; and
    • may wish to contact the state insurance commissioner regarding any rights under state law to pay premiums directly to the insurance company or convert health coverage to an individual policy.

Practical Impact

Although several months have passed since Hurricane Sandy struck the East Coast, the FAQs reflect the storm's lasting impact on benefits administration. Other questions addressed include locating plan administrators and payment of COBRA premiums. The FAQs also offer general guidance on retirement plan issues that participants and beneficiaries may be facing as a result of Hurricane Sandy.
For coverage of earlier guidance for Hurricane Sandy-impacted employee benefit plans, plan sponsors and service providers, see Legal Update, DOL Issues Employee Benefit Plan Compliance Guidance for Hurricane Sandy. For more information on COBRA coverage and domestic partner benefits, see respectively, Practice Note, COBRA Overview and Practice Note, Domestic Partner Health Benefits.