By Stephanie K. Schmid
During the COVID-19 pandemic, a flurry of laws were enacted and guidance was issued that temporarily affect group health plans. Some of these changes will end with expiration of the national emergency, initially declared by the Trump Administration, effective as of March 1, 2020. Others will end with the public health emergency, initially declared by the Secretary of Health and Human Services effective as of January 1, 2020. Additionally, a few changes are not tied to the national emergency or the public health emergency.
On January 30, 2023, the Biden Administration announced its intent to end the national emergency on May 11, 2023. Shortly after, the Secretary of Health and Human Services announced the intent to end the public health emergency on the same day. The Department of Labor, the Department of Health and Human Services, and the Treasury (Tri-Agencies) issued guidance on March 29, 2023, addressing the impact the end of the national and public health emergencies will have on group health plans.
Despite the previous announcement, President Biden signed House Joint Resolution 7 into law on April 10, 2023, ending the national emergency about a month earlier than anticipated. Given the fact that the Tri-Agencies' previously issued guidance was based on the national emergency ending on May 11, 2023, it was unclear how this law would impact participant deadline extensions, which are tied to the national emergency. However, the Department of Labor (DOL) has informally announced that the resolution would not impact its previous guidance. In other words, for purposes of calculating participant deadlines, the Outbreak Period, which normally ends 60 days after the end of the national emergency, will end on July 10, 2023, as if the national emergency ends on May 11, 2023. At this time, it is unclear if the DOL will issue formal guidance, but plan sponsors should continue to rely on the Tri-Agencies previous guidance.
With the end of the public health emergency and Outbreak Period near, employers that sponsor group health plans will need to consider the following issues outlined below.
COVID-19 Diagnostic Testing
During the public health emergency, most group health plans are required to cover COVID-19 testing and certain testing-related services without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization or other medical management requirements. In January 2022, the Tri-Agencies issued guidance expanding the coverage requirement to include over-the-counter COVID-19 tests.
After the public health emergency ends, plans are no longer required to cover COVID-19 testing (including over-the-counter tests) or certain testing-related visits without cost-sharing. Plan sponsors need to consider whether such coverage will continue without cost-sharing or if cost-sharing will apply. Plan sponsors will also need to determine if their plans will continue covering over-the-counter COVID-19 tests generally, and if so, whether out-of-network tests will be covered.
Mental Health Parity Relief
In June 2020, the Tri-Agencies issued guidance allowing plans to disregard COVID-19 items and services required to be covered without cost-sharing for purposes of compliance with certain Mental Health Parity requirements. Unless additional guidance is issued, this relief ends with the public health emergency. If a plan sponsor anticipates that coverage for COVID-19 testing without cost-sharing will continue, it may want to consider performing financial requirement testing to ensure Mental Health Parity compliance.
Health Savings Account Eligibility Relief
For an individual to be eligible to contribute to a Health Savings Account (HSA), they must be covered by a qualified high-deductible health plan (HDHP). A qualified HDHP may not pay for any benefits until a participant meets the deductible requirement. In March 2020, the IRS issued guidance allowing HDHPs to cover COVID-19-related testing and treatment on a pre-deductible basis without jeopardizing participants' eligibility to contribute to an HSA.
The Tri-Agencies issued guidance on March 29, 2023, clarifying that the IRS's previous guidance will remain in effect until further guidance is issued and that such guidance would not require plans to make changes in the middle of a plan year. This means that HDHPs may continue covering COVID-19 testing on a pre-deductible basis for the current plan year. At this time, however, it is unclear when this guidance will expire, so plan sponsors should watch for any changes.
Separately, Congress has enacted legislation allowing HDHPs to provide telehealth services on a pre-deductible basis. This relief is not tied to the national or public health emergencies and was recently extended for plan years beginning in 2023 and 2024, as part of the Consolidated Appropriations Act, 2023.
COVID-19 Vaccines
During the public health emergency, non-grandfathered group health plans must cover, without cost-sharing, "qualifying coronavirus preventive services," regardless of whether they are from an in-network or out-of-network provider. Qualifying coronavirus preventive services include COVID-19 vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention.
After the public health emergency ends, non-grandfathered plans must continue to cover, without cost-sharing, COVID-19 vaccines from in-network providers. However, plans will no longer be required to cover COVID-19 vaccines from out-of-network providers. Plan sponsors will need to determine if COVID-19 vaccines from out-of-network providers will be covered, and if so, whether they will be provided at no cost or what cost-sharing will apply.
EAP Relief
An Employee Assistance Program (EAP) may be considered an "excepted benefit" and will not be subject to the health reform requirements of the Affordable Care Act, if, among other requirements, the EAP does not provide significant medical care. The Tri-Agencies previously issued guidance allowing EAPs to provide COVID-19 testing and vaccines during any portion of the public health emergency or national emergency without being considered as providing significant health care benefits. If an employer wishes to continue providing COVID-19 testing or vaccines through its EAP, it should collaborate with its employee benefits advisor to determine whether providing such coverage rises to the level of significant medical care that may jeopardize the EAP's excepted benefit status.
Participant Deadline Extensions
During the national emergency, plans are required to suspend individual participant deadlines, by disregarding days during the Outbreak Period, which is the period beginning March 1, 2020, and ending sixty days after the announced end of the national emergency. However, plans are only required to extend deadlines up to one year (or until the end of the Outbreak Period, whichever occurs first). This relief applies to the following deadlines: electing COBRA coverage; notifying the COBRA administrator of qualifying events or determination of disability; making COBRA premium payments; electing special enrollment rights; requesting or perfecting a request for external review; and filing a claim or appeal.
As noted above, although the national emergency ended on April 10, 2023, with the passage of House Joint Resolution 7, the DOL has informally indicated that this law would not impact its previous guidance, meaning the Outbreak Period will end on July 10, 2023. After the Outbreak Period ends, normal deadline calculations will resume. Essentially, this means that any individual deadline being temporarily suspended on July 10, 2023, will begin to run. The guidance issued by the Tri-Agencies on March 29, 2023, clarified that this is the minimum timeframe and that nothing prevents a plan from providing longer periods for employees to complete certain elections or other actions.
Given the complexity of calculating deadlines during the national emergency, employers should consider how to communicate any applicable deadlines clearly and accurately. If an employer outsources COBRA administration, external review requests, or review of claims and appeals, it should work with those vendors to determine if additional participant notices or communications are needed. Specifically, in light of ongoing litigation involving COBRA notice deficiencies, employers may want to consider sending an updated notice or communication to inform individuals of their upcoming COBRA deadlines.
Plan Amendments and Participant Notice
Employers will need to ensure plan documents, summary plan descriptions, and other participant communications accurately reflect COVID-19 coverage after the public health emergency ends and deadlines for various actions after the Outbreak Period ends. Plan documents may need amendments, depending on the specific language used in the plan. If a formal amendment is needed, a Summary of Material Modification (SMM) must be sent to all participants.
Guidance issued by the Tri-Agencies on March 29, 2023, encourages plans to notify participants about key information relating to COVID-19 diagnosis and treatment coverage, such as the date coverage will end, or the date cost-sharing will be imposed. Accordingly, even if an SMM is not required, plan sponsors may want to consider sending a notice to participants informing them about COVID-19 coverage available after the public health emergency ends and that deadline extension relief will end with the end of the Outbreak Period.
Conclusion
The end of the national emergency and the public health emergency will have significant impacts on group health plans. It is important for employers to review all related information and documents to ensure compliance and understanding of these upcoming changes. Employers should review their group health plans in the event they need to prepare amendments and work with their service providers and legal counsel on the issues outlined above.
By Stephanie K. Schmid
stephanie.schmid@stinson.com
Stephanie Schmid is an associate in Stinson’s Labor, Employment & Benefits practice where her passion for finding solutions helps employers implement and administer employee benefit programs. She assists employers of all sizes and from various industries on implementing and maintaining retirement and health and welfare plans to ensure compliance with ERISA and the Internal Revenue Code. She has experience drafting amendments to plan and trust documents, as well as preparing required plan disclosures and notices.