This distinction of "covered" and "noncovered" occurred as a result of a law pass in January 2011 where the brokerage was then required to report cost basis for shares to you and the IRS. for shares acquired after January 2011. The term "covered" is used for this reporting. For shares acquired prior to January 2011 there is no brokerage reporting requirement. Hence the term "noncovered".
From Vanguard:
For tax-reporting purposes, the difference between covered and noncovered shares is this: For covered shares, we're required to report cost basis to both you and the IRS. For noncovered shares, the cost basis reporting is sent only to you. You are responsible for reporting the sale of noncovered shares.
