Health Plan Provisions and FAQs in COVID-19 Related Guidance

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On March 27, the President signed the Coronavirus Aid, Relief and Economic Security Act (“CARES Act” or “Act”), which contains a number of tax- and employee benefit-related provisions that are intended to provide economic relief for companies, individuals and families affected by the COVID-19 pandemic. This Alert discusses the relief provided relating to employee benefit plans regarding health plans. April 11, 2020, the Centers for Medicare & Medicaid Services (CMS) together with the Departments of Labor and Treasury issued guidance related to the implementation of the FFCRA and CARES: https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.

GROUP HEALTH PLANS PROVISIONS

Coverage for COVID-19 Diagnostic Testing

Expanding upon the Family First Coronavirus Response Act (“FFCRA”), the CARES Act requires group health plans and insurers to cover, without preauthorization requirements and cost-sharing to the participant, certain diagnostic testing for detection or diagnosis of COVID-19 and related services. The CARES Act broadens the permissible testing solely from tests approved by the FDA to tests by developers under the emergency use authorization provisions of the FDA, by a State, or other methods approved by the Secretary of Health and Human Services. Group health plans will be required to cover such testing at the in-network provider negotiated price or, if the health plan or issuer does not have a negotiated in-network rate with such provider, at an amount that equals the cash price for such service as listed by the provider on a public Internet website. Group health plans and issuers are also free to negotiate a lower payment rate with providers.

The guidance released by CMS and the Departments of Labor and Treasury on April 11, 2020 clarified a number of important aspects of coverage for COVID-19 diagnostic testing. First, the guidance states that items and services furnished to an individual during healthcare provider visits, urgent care center visits, and emergency room visits that result in an order for administration of a COVID-19 test are covered by the Act. Testing includes both tests provided in traditional and non-traditional settings such as drive-through testing facilities. The coverage, however, only applies to the extent the services are related to the furnishing of a COVID-19 test or the evaluation of an individual to determine the need to provide a COVID-19 test. For example, the guidance makes clear that if an individual’s attending provider determines that an influenza test or a blood test should be performed during a visit to determine whether a COVID 19 test is needed and the visit results in an order for COVID-19 testing, then the plan or issuer is required to provide coverage for those related tests (i.e. the influenza test or blood test).

Additionally, the guidance makes clear that the Act covers serological tests used to detect antibodies against COVID-19. Thus, group health plans and health insurance issuers are required to provide coverage for COVID-19 antibody testing.

Coverage for COVID-19-Related Preventive Services

Group health plans and health insurance issuers are required to cover (without cost-sharing to the participant) any “qualifying coronavirus preventive service” as a preventive benefit under the Affordable Care Act (ACA). A “qualifying coronavirus preventive service” is an item, service, or immunization that is intended to prevent or mitigate COVID-19 and is (A) an evidence-based item or service that has in effect a rating of ‘‘A’’ or ‘‘B’’ in the current recommendations of the U.S. Preventive Services Task Force; or (B) an immunization that has in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved. Contrary to the current rule under the ACA, which permits a delay in covering certain preventive services or medications, there is an accelerated effective date of 15 days after the date upon which a recommendation is made related to the qualifying coronavirus preventive service for the plan to cover such services or medications.

Telehealth Services

The Act amends the Health Savings Account (HSA) rules under Code Section 223 to provide that for plan years beginning on or before December 31, 2021, a high-deductible health plan (“HDHP”) with an HSA can cover telehealth services and other remote care services prior to an HSA-eligible individual reaching the deductible under the HDHP, effective as of the date of enactment. This does not appear to change the rules under ERISA and the ACA that apply to stand-alone group health plans.

Further, CMS and the Departments of Labor and Treasury have advised that group health plans and issuers are “strongly encouraged” to promote the use of telehealth and other remote care services through notifying consumers of the availability of telehealth and remote health services, ensuring consumers’ access to such services including mental health and substance abuse disorder services, and by covering telehealth and other remote health service without cost-sharing or other medical management requirements.

Over-the-Counter Products and Medications

The Act permits reimbursement of over-the-counter medications and products, including menstrual care products, from an HSA prior to an HSA-eligible individual reaching the deductible under the HDHP. It clarifies that such items are reimbursable under health care flexible spending accounts (“FSA”). Over-the-counter products and medications, including those needed in quarantine and social distancing, are now reimbursable through an HSA or FSA without a prescription from a physician.

Excepted Benefits provided by an Employee Assistance Program (EAP)

The guidance released by CMS and the Departments of Labor and Treasury also clarified whether an EAP offer of benefits for COVID-19 diagnosis and testing, including at an on-site medical clinic, constitutes an excepted benefit. Specifically, the guidance provides that (1) an employer can offer benefits for diagnosis and testing for COVID-19 under an EAP that constitute an excepted benefit and (2) an employer may offer benefits for diagnosis and testing for COVID-19 at an on-site medical clinic that constitute an excepted benefit.

Extensions of Deadlines

The Secretary of Labor has the authority to extend various deadlines under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the event of “terroristic or military actions.” The Act expanded that authority so that it applies in the event of public health emergencies as well.

The Public Health Service Act generally requires a plan or issuer to provide at least 60 days advance notice to enrollees of a material modification as defined by ERISA to the terms of a plan or coverage. Pursuant to the recent guidance issued by CMS and the Departments of Labor and Treasury, a plan or issuer may make a material modification to its plan or coverage in an effort to provide coverage related to the diagnosis and/or treatment of COVID-19 without providing 60 days’ notice as long as they provide the notice of the change as soon as reasonably practicable.

Similarly, CMS and the Departments of Labor and Treasury have stated they will apply the same non-enforcement policy to allow plans and issuers to add benefits for telehealth and other remote care services or to reduce and/or eliminate cost-sharing for telehealth and other remote care services. Plans and issuers are only required to provide notice of the changes as soon as reasonably practical.

Effective and Sunset Dates

These provisions generally took effect on March 18, 2020. Additionally, it is important to note that nothing prevents a state from imposing additional standards or requirements on health insurance issuers relating to COVID-19 to the extent those standards or requirements do not prevent the application of a federal requirement.

FordHarrison is closely monitoring the spread of Coronavirus and associated federal and state legislation and has implemented continuity plans, including the ability to work remotely in a technologically secure environment when necessary, to ensure continuity of our operations and uninterrupted service to our clients. 

Please see our dedicated Coronavirus Taskforce and Coronavirus – CARES Act pages for the latest FH Legal Alerts and webinars on Coronavirus and workplace-related provisions of the CARES Act, as well as links to governmental and industry-specific resources for employers to obtain additional information and guidance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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