The COVID-19 national emergency and public health emergency officially ended on April 10 and May 11, 2023, respectively. (As a practical matter, the Biden administration is effectively treating both emergencies as ending on May 11, 2023, however.) The end of the emergencies offers sponsors of group health plans the opportunity to modify certain COVID-19-related benefits that were offered in the past several years because of national emergency and public health emergency-related legislation and regulations.
In early 2020, following passage of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the release of guidance from the Internal Revenue Service, Department of Labor, and Department of Health and Human Services (collectively, the Agencies), group health plan sponsors and administrators worked quickly to implement new mandates and incorporate plan operational flexibility relating to the coverage and provision of COVID testing, vaccines, and telehealth. (In addition, the Agencies also adopted various extensions to employee benefit plan deadlines that are coming to an end with the end of the national emergency, as discussed in a previous Spotlight on Benefits post.)
Now, employers have the option to reverse some of those changes under their group health plans. The following summarizes several COVID-related health plan benefits and the actions employers should consider.
During the Public Health Emergency. The FFCRA and CARES Act required plans to cover COVID-19 tests and related diagnostic services (COVID tests) without cost sharing or the use of medical management techniques such as prior authorization, regardless of whether the provider is in-network or out-of-network. (Special rules applied to over-the-counter COVID tests. A “safe harbor” rule allowed plans to cap out-of-network COVID tests at $12 per test if the plan made over-the-counter tests available to participants at no out-of-pocket expense via a network of pharmacies and a home delivery service.)
In addition, IRS guidance allowed high-deductible health plans to cover COVID tests as well as treatment of COVID-19 before a participant satisfied the deductible without affecting participants’ eligibility to contribute to health savings accounts.
After the Public Health Emergency. Health plans can enforce network restrictions, impose cost-sharing, apply medical management techniques such as prior authorization, and even stop covering COVID tests altogether. Plan sponsors may take any of these actions immediately or wait until the end of the current plan year or other future date. Plans continuing full coverage should consider any impact on mental health parity of the plan’s financial requirements. Plan document and notice requirements are discussed below. Note that COVID-19 tests will generally continue to be an eligible medical expense reimbursable under health flexible spending accounts, health reimbursement arrangements, and health savings accounts.
IRS guidance allowing pre-deductible coverage of COVID tests and treatment services under high-deductible health plans will continue to apply until further notice. The IRS has stated that any future modifications to the guidance will not generally require high-deductible health plans to make changes in the middle of a plan year.
During the Public Health Emergency. The CARES Act required plans to cover approved COVID-19 vaccines and preventive services at no charge, whether received from an in-network or out-of-network provider.
After the Public Health Emergency. Plans must continue to cover, at no charge, COVID-19 vaccines, but only when furnished by in-network providers. This requirement will continue indefinitely, if COVID-19 vaccines remain a mandated “preventive service” under the Affordable Care Act.
Pre-Deductible Telehealth Under High-Deductible Health Plans
During Plan Years Beginning on or after January 1, 2020 through December 31, 2024. Employers that sponsor high-deductible health plans can, but are not required to, offer telehealth services before meeting the plan’s deductible without affecting participants’ eligibility to contribute to a health savings account. (There was technically a gap for non-calendar year plans for the period of January 1, 2023 to the first day of the 2023 plan year, during which pre-deductible telehealth was not permitted.)
During Plan Years Beginning After December 31, 2024. High-deductible health plans cannot offer telehealth services (other than preventive services) on a pre-deductible basis without jeopardizing participants’ eligibility to contribute to a health savings account.
During Plan Years Beginning During the Public Health Emergency. A “large employer” (generally, an employer that employed an average of at least 51 employees on business days during the previous year) could provide access to telehealth benefits, exempt from certain regulatory requirements that would normally apply to a group health plan, for employees who were not eligible under the employer’s major medical plan.
During Plan Years Beginning After the Public Health Emergency. The exception for telehealth-only coverage no longer applies for plan years beginning after May 11, 2023.
Employee Assistance Plan COVID-19 Testing/Vaccination Coverage
During the Public Health Emergency and National Emergency. Employee assistance plans could offer COVID tests and vaccinations without losing excepted benefit status, as long as the benefits provided did not rise to the level of “significant benefits in the nature of medical care” and the following regulatory requirements were met: (a) there was no mandate to exhaust employee assistance plan benefits prior to the use of group health plan benefits; (b) eligibility for employee assistance program benefits was not tied to group health plan eligibility; (c) no employee premiums or contributions were required; and (d) there was no cost sharing.
After the Public Health Emergency and National Emergency. This exception for employee assistance plan COVID test coverage will no longer apply, pursuant to the Agencies’ guidance on this topic issued in 2020, so it is possible that an employee assistance plan offering COVID tests could be considered a group health plan if the employee assistance plan’s benefits were considered “significant benefits in the nature of medical care.” The Agencies have not issued updated guidance regarding the end of this employee assistance plan benefit, so employers do not have Agency guidance to rely upon to continue to make COVID-19 testing benefits available through an employee assistance plan after the Public Health Emergency and National Emergency end.
The exception for employee assistance plan COVID-19 vaccination coverage appears to remain in effect after the end of the Public Health Emergency and National Emergency. Unless other guidance is released by the Agencies, employers can likely assume that providing COVID-19 vaccinations through an employee assistance plan will not, on its own, cause the employee assistance plan to lose excepted benefit status.
Plan Documents and Participant Notices
Plan sponsors considering any of the above changes should review their formal plan documents to determine if any amendments are needed. In addition, plan administrators should review their summaries of benefits and coverage (SBCs), summary plan descriptions (SPDs), and summaries of material modifications (SMMs) to determine if any updated notices should be provided to participants about changes.
Generally, if the terms of a health plan’s SBC are impacted by a material modification to the plan terms, the health plan has to provide notice of the modification 60 days prior to the effective date. However, Agency guidance indicates health plans will be considered to satisfy this requirement if:
- The health plan previously notified participants of the general duration of the coverage (g., the coverage is available “during the public health emergency”); or
- The health plan provides notice within a reasonable timeframe in advance of the reversal of the changes.
The guidance indicates that notices provided with respect to a prior year will not be considered to satisfy the obligation to provide advance notice for a change in the current year. Changes in coverage that impact the terms of a health plan’s SPD have to be disclosed in a revised SPD or in a separate SMM. If the change to the health plan is a material reduction, notice is required within 60 days after the change is adopted. For SBC and SPD disclosures, plan administrators will have to assess the impact of earlier DOL guidance giving additional time to furnish notices, disclosures, and other documents required by provisions of Title I of ERISA, which applies until July 10, 2023, if the plan and responsible fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances.
The Agencies encourage employers to notify plan participants about any changes being made to plans, even if advance notice is not required. The Agencies also generally encourage health plans to remain flexible and continue to offer more generous COVID-related benefits than are required, when permitted.
If you have questions about covering COVID-19-related benefits or implementing changes, please contact a member of the Faegre Drinker Benefits & Executive Compensation team.
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