Hurricane Katrina Relief: Extended Deadlines for Health Coverage Decisions

Strategic Insights -

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) and the Internal Revenue Service (IRS) have announced an extension of various deadlines to help workers and employers affected by Hurricane Katrina make critical health coverage decisions. This relief provides additional time to comply with certain deadlines under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance Portability and Accountability Act (HIPAA), and the rules for processing of health claims. The affected individuals will have more time to secure health coverage without losing coverage for preexisting health conditions, request enrollment in other group health coverage, and elect continuation health coverage under COBRA.

Key Takeaways:

  • The extension of deadlines provides relief to workers and employers affected by Hurricane Katrina, allowing them additional time to make critical health coverage decisions.
  • The time frames for HIPAA portability and COBRA continuation coverage have been tolled for the period between August 29, 2005, and February 28, 2006, freezing the application of time periods through February 28, 2006.
  • The extension allows Katrina victims more time to secure health coverage without losing coverage for preexisting health conditions, request enrollment in other group health coverage, and elect continuation health coverage under COBRA.
  • The COBRA rules have been extended to give victims more time to make premium payments, and the benefit claim procedure rules require plans to extend time frames for affected individuals to file a benefit claim and to file an appeal.
  • The affected individuals will have more time to comply with HIPAA portability and COBRA continuation coverage rules, including the deadlines for requesting enrollment in other group health coverage and electing continuation health coverage.
  • The extension of deadlines is intended to minimize the possibility of individuals losing benefits due to a failure to comply with certain pre-established time frames.
  • The Labor Department and IRS will continue to monitor the situation to address the issues that are most important in helping individuals, employers, and plan sponsors recover from the tragedy.

Statistics:

  • 63 days: The general HIPAA rule for disregarding prior credit due to lack of coverage has been extended to allow Katrina victims more time to secure health coverage without losing coverage for preexisting health conditions.
  • 30 days: The relief has also been provided to allow Katrina victims more time to request enrollment in other group health coverage under HIPAA's special enrollment rights.
  • 60 days: The general COBRA rules allowing 60 days to request COBRA coverage have been extended to give Katrina victims more time to request continuation coverage.
  • February 28, 2006: The time frames for the HIPAA portability and COBRA continuation coverage have been tolled for the period between August 29, 2005, and February 28, 2006, freezing the application of time periods through February 28, 2006.

Sources:

  • U.S. Department of Labor's Employee Benefits Security Administration (EBSA) and the Internal Revenue Service (IRS)
  • U.S. Newswire (October 11, 2005)
  • Fact Sheet: Extension of Time Frames to Help Plans and Individuals Affected by Hurricane Katrina (October 2005)
  • Federal Register (October 12, 2005)