Extended deadlines — EBSA Disaster Relief Notice 2021-01
Learn more about the timing of claim submission deadline extensions for flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs), due to COVID-19.
On February 26, 2021, the Department of Labor and IRS released EBSA Disaster Relief Notice 2021-01, providing clarification around the timing of certain deadlines that were extended in EBSA Disaster Relief Notice 2020-01.
You may recall that the 2020 Notice, in response to the COVID-19 National Emergency, created a “disregarded period” for purposes of calculating certain deadlines related to health and welfare benefit plans. With regard to health care FSAs and HRAs, the period following the plan year in which participants may submit claims incurred in the prior plan year (“runout period”) is considered a claims submission deadline that must be extended due to the guidance.
The 2020 Notice stated that the disregarded period would begin on the date the 2020 Notice was released or the date a relevant period began to run, whichever is later, and would run until 60 days following the end of the declared COVID-19 National Emergency. After the end of that disregarded period, the clock would begin to run again. However, the 2020 Notice also indicated that the agencies had limited authority and were only able to enforce a maximum disregarded period of one year.
The 2021 Notice clarifies that the agencies’ maximum authority applies on a rolling basis and that the guidance from the 2020 Notice will continue until 60 days after the declared end of the COVID-19 National Emergency. However, all mandated disregarded periods.
What this means for your tax-advantaged plans:
For 2019 plan years with a runout period ending on or after March 1, 2020, the disregarded period is now considered over and the new final deadline to submit claims incurred in 2019 will be the original month and date your runout was intended to end, but in 2021. For example, if your 2019 plan had a runout date of March 31, 2020, then the new final claims submission deadline for 2019 claims will be March 31, 2021.
For plan years ending in 2020 or 2021, the disregarded period will be either one year or 60 days following the end of the COVID-19 National Emergency, whichever is earlier. The disregarded time would then be added to the end of the disregarded period. For example, if your 2020 runout began on January 1, 2021, and was intended to run until March 31, 2021, and the COVID National Emergency is declared over on June 30, 2021, then the disregarded period will end on August 30, 2021. Then, the 90-day runout period will begin to run again, and the new final claims submission deadline will be November 30, 2021.
In summary, refer to your original claim submission deadline in 2020 for 2019 plans; that runout period will now expire on the same date in 2021. However, your 2021 runout period for 2020 plans is now extended until one year after the original runout ends, or 60 days after the declared end of the COVID-19 National Emergency, whichever is earlier.
If you have any questions, please contact your Relationship Manager or Optum Bank client services. We advise you to speak with your tax or benefits counsel regarding interpretation of the legislation.