FAQs on COVID-19 Group Health Plan Coverage Implementation

The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury (collectively, “the Departments”) issued Frequently Asked Questions for health plans implementing coverage changes under the Families First Coronavirus Response Act (Families First Act) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

COVID-19 Diagnostic Testing

The requirement to cover COVID-19 detection and diagnostic testing with no cost-sharing applies to group health plans and health insurance issuers offering group or individual health insurance coverage (including grandfathered health plans under the Affordable Care Act) (collectively, “health plans”). These rules do not apply to short-term, limited-duration coverage, excepted benefit health plans, or plans that cover fewer than two current employees, such as retiree-only medical plans. Covered health plans are subject to these requirements from March 18, 2020, through the date the public health emergency ends (currently June 16, 2020, unless extended or terminated earlier). The FAQs describe the following requirements related to COVID-19 diagnostic testing:

Types of tests covered – Health plans are required to cover diagnostic tests for the detection of SARS-CoV-2 or the diagnosis of COVID-19, including those tests approved by the FDA, tests for which the developer has requested emergency use authorization by the FDA, tests developed in and authorized by a state with notice to the Secretary of HHS, or other tests approved by the Secretary of HHS in guidance. Health plans also must cover serological tests for COVID-19 that are used to detect antibodies against the SARS-CoV-2 virus, and are intended for use in the diagnosis of the disease or condition of having current or past infection with SARS-CoV-2.

Other services covered – Health plans are required to cover items and services furnished to an individual during an office, urgent care, emergency room or telehealth visit, including COVID-19 drive-through screening and testing sites where licensed health care providers are administering COVID-19 diagnostic testing, that relates to the furnishing or administration of the COVID-19 diagnostic test, or to the evaluation of such individual for purposes of determining the need for the test. This includes coverage for other tests, such as influenza tests and blood tests, that an individual’s health care provider orders during such a visit to determine the need for COVID-19 diagnostic testing, and the visit results in an order for or administration of COVID-19 diagnostic testing.

No cost-sharing, prior authorization or medical management permitted – Health plans must cover the cost of all items and services that the individual’s attending health provider determines are medically appropriate for the individual, in accordance with accepted standards of medical practice. Health plans may not impose cost-sharing (including deductibles, copayments and coinsurance), prior authorization requirements or other medical management requirements.

In-network and out-of-network coverage required – Health plans are required to cover the cost of the COVID-19 testing and related services described above whether provided in-network or out-of-network. Plans reimburse providers with whom the health plan has a negotiated rate at the negotiated rate. For providers with whom a health plan does not have a negotiated rate, the health plan is to reimburse the provider at the cash rate the provider lists on its public internet site or at such lesser amount the plan negotiates with the provider. All providers are to post cash rates for diagnostic testing or face penalties of $300 per day of the violation, unless the provider completes a corrective action plan.

Plan Amendments and Required Disclosures

One of the most frequently asked questions from plan sponsors is about plan amendment requirements to reflect the plan change for COVID-19. Specifically, rules regarding the Summary of Benefits and Coverage (SBC) would typically require 60 days advance notice for mid-year changes affecting the content of the SBC. Since CARES Act changes requiring zero-cost coverage for testing and related visits took immediate effect on March 18, 2020, plan sponsors could not provide advance notice of these types of changes. In addition, many plan sponsors have been acting quickly to implement plan changes beyond what is legally required, such as offering telemedicine visits at zero cost for all services, not just for diagnosis or treatment of COVID-19, with immediate effect.

In the FAQs, the Departments announce a non-enforcement position against any plan or issuer that amends its health plan to provide greater coverage for the diagnosis and/or treatment of COVID-19, or to provide expanded coverage for telemedicine and other remote-care services without providing at least 60 days advance notice. Instead, health plans must provide notice of these changes as soon as reasonably practicable by issuing a new SBC or a notice of material modification describing the changes. Similarly, HHS promises not to take enforcement action against health insurance issuers that change the benefits or cost-sharing structure of their plans mid-year to provide increased coverage for services related to the diagnosis and treatment of COVID-19, and encourages state regulators to take a similar approach. The Departments’ non-enforcement position as to the requirement to provide advance notice of changes to SBC content will last through the end of the current public health emergency, but the Departments caution that any health plans that wish to maintain coverage changes beyond the public health emergency period must comply with all other applicable requirements to update plan documents or terms of coverage. The Departments also state that they will continue to take enforcement action against any health plans that attempt to limit or eliminate other benefits or to increase cost-sharing to offset the cost of increasing benefits for COVID-19 diagnosis and treatment.

Generally, other than mid-year changes affecting SBCs, ERISA requires material reductions in benefits provided by health plans to be communicated to participants within 60 days after adoption. Other health plan changes generally must be communicated to plan participants through updated summary plan descriptions (SPDs) or summaries of material modification within 210 days after the end of the plan year in which the changes took effect. Depending on the specific changes plan sponsors make to their health plans, they should consult with their benefits counsel to make sure they are meeting the legal requirements regarding plan amendments.

State Requirements

The FAQs clarify that states may impose additional requirements on health insurance issuers with regard to the diagnosis or treatment of COVID-19, so long as the requirements do not conflict with the federal requirements. Any such state requirements would likely apply only to fully insured plans and not to self-funded health plans that are governed by ERISA, which generally preempts state insurance laws of this nature.

Excepted Benefits

Employers have been trying to devise ways to provide COVID-19 diagnosis and testing to all employees, including those not covered by the employer’s health plan. This is challenging because of all the regulatory requirements that apply. In this FAQ, the Departments may have helped some employers by clarifying that employers may offer coverage for COVID-19 diagnosis and testing to all employees through their on-site medical clinics or through their employee assistance programs for the duration of the current public health emergency without affecting the status of such clinics and programs as excepted benefits. This is important because excepted benefits are exempt from certain mandates under the Public Health Services Act, ERISA and the Internal Revenue Code, including special enrollment requirements, requirements to provide preventive care with zero cost-sharing and requirements to provide essential benefits with no annual or lifetime limits, among others.

Employers may wish to explore adding diagnosis and testing for all employees to the benefits provided by their employee assistance program or on-site medical clinic. Employers had hoped that the Departments would expand the category of excepted benefits to include telemedicine and other remote-care services. Instead, in this FAQ the Departments encouraged employers to provide expanded telemedicine services and reminded employers of the provisions in the CARES Act that allow employers to provide zero-cost telemedicine for COVID-19 testing and treatment and for all other telemedicine services from March 27, 2020, through the end of the plan year beginning on or before December 31, 2021, without affecting eligibility of participants in high-deductible health plans to contribute to health savings accounts.