May 7, 2020
Asked and Answered: Agencies Issue FAQs on COVID-19 Requirements for Group Health Plans
By Allison B. Bans and Amberlee Conley
On April 11, 2020, the Departments of Labor, Health and Human Services, and the Treasury (the “Departments”) issued "FAQs About Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 42" (“COVID-19 FAQs”) on the implementation of the health coverage requirements in the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
This welcomed guidance clarifies the rules related to group health plans, as previously discussed in our SW Benefits Updates, “COVID-19: Employer Group Health Plan Changes to Help Employees and Stop the Spread of the Virus” and “The CARES Act – What are the Health and Welfare Plan Issues to Consider?”
Some takeaways from the COVID-19 FAQs include:
- Affected Plans. As a reminder, Section 6001 of FFCRA, as amended by Section 3201 of the CARES Act, generally requires group health plans to cover, without any cost-sharing, prior authorization, or medical management requirements, COVID-19 testing and items and services provided to an individual during a visit that results in COVID-19 testing during the public health emergency related to COVID-19. Q1 of the COVID-19 FAQs clarifies that these requirements do not apply to plans covering less than two current employees (e.g., retiree-only plans), excepted benefits, or short-term limited-duration insurance. Excepted benefits, in relevant part, include benefits that are not generally health coverage (e.g., on-site medical clinics) and limited excepted benefits (e.g., limited scope vision or dental benefits and employee assistance programs (“EAPs”) that meet certain requirements). Nonetheless, the Departments have clarified in Q11 and Q12 of the COVID-19 FAQs that an employer may offer benefits for diagnosis and testing for COVID-19 under an EAP that constitutes an excepted benefit and/or an on-site medical clinic that constitutes an excepted benefit. These could be good options for employers to offer COVID-19 testing to employees not covered under the employer’s group health plan.
- Required Testing Coverage. As noted in Q5 and Q6 of the COVID-19 FAQs, items and services are only required to be covered without cost-sharing under Section 6001 of FFCRA if the items and services, whether in-network or out-of-network, are “medically appropriate for the individual, as determined by the individual’s attending healthcare provider.” This means the healthcare provider, not the insurer or third-party administrator, decides if testing is medically appropriate. Q4 and Q5 of the COVID-19 FAQs clarify that these coverage requirements can include serological tests (used to determine antibodies for COVID-19) and tests for other respiratory illness causes, like influenza or blood tests, if such test is performed during a visit to determine a patient’s need for COVID-19 testing and such visit results in an order for or administration of COVID-19 testing.
- SBC Nonenforcement. The Summary of Benefits and Coverage (“SBC”) rules normally require that if a plan makes a material modification in any of the terms of the plan or coverage that would affect the content of the SBC, the plan must provide notice of the modification to enrollees not later than 60 days prior to the date on which the modification will become effective (the “SBC Advance Notice Rule”). Q9 and Q14 of the COVID-19 FAQs indicate that the Departments will temporarily not take enforcement action against a plan that fails to meet the SBC Advance Notice Rule if the plan is modified to: (1) provide greater coverage related to the diagnosis or treatment of COVID-19, and/or (2) add, or reduce cost-sharing for, telehealth or remote care benefits. Nonetheless, the notice of the changes must be provided “as soon as reasonably practicable” and can be provided through an updated SBC reflecting the modification or a separate notice describing the material modifications. Although this may be welcome relief, these nonenforcement policies only apply while there is a public health emergency declaration, or a national emergency declaration, related to COVID-19. Finally, because the failure to comply with the SBC rules may potentially trigger a $100 excise tax per day for each individual affected by the failure and a $1,000 (adjusted for inflation) civil monetary penalty per failure, employers may want to take extra care to confirm that they fall within this nonenforcement relief.