Employment Law Report

COVID-19 Changes to Health Insurance

By Sherry P. Porter

The Center for Medicare and Medicaid Services, the Department of Labor and the Department of Treasury issued joint guidance this week that will be helpful to employers that sponsor group health plans and insurers that provide health insurance coverage or provide third party administration services to group health plans.

Congress recently passed the Families First Coronavirus Relief Act and the Coronavirus Aid, Relief and Economic Security Act to help with various issues caused by the COVID-19 pandemic in the US.  These two laws required group health plans to provide first dollar coverage for COVID-19 testing without cost sharing, prior authorizations and medical management requirements.  As with any law, there were many questions that needed to be answered.  This guidance answers some of the open questions.

First, the guidance, in the form of questions and answers, clarifies that group health plans and group and individual health insurance are required to cover diagnostic testing and certain related items and services during a medical visit at no cost to the covered individual.  This includes urgent care visits, emergency room visits, in-person and telehealth visits with a doctor’s office that result in an order or administration of COVID-19 testing.  This requirement applies to fully insured plans, self-insured plans, private employer provided group health plans, state and local government group health plans, church plans and individual policies through the health insurance exchange or individual market. COVID-19 testing was further clarified to include all in vitro diagnostic tests authorized by the FDA, COVID-19 tests authorized on an emergency basis by the FDA and COVID-19 tests developed or authorized by states, as well as certain serological tests to determine antibodies.  This coverage is required for in network, as well as, out of network providers.

Q&A 5 clarifies that if a covered individual seeks medical care and the provider prescribes other tests (like influenza tests and blood tests) that are needed to determine the need for COVID-19 testing, those services need to be covered first dollar as well, if a COVID-19 test is ultimately ordered or administered. Employee assistance plans (EAPs) and employer on-site medical clinics may also cover these tests and not lose their excepted benefits status.

Plan sponsors will still need to notify plan participants/covered individuals of this change in coverage but the guidance reflects loosened standards.  Instead of being required to provide sixty (60) days’ prior notice, no enforcement action will be taken if the notice is given as soon as reasonably practicable.  However, so long as the public health emergency related to COVID-19 exists, the departments will take enforcement action if the plan or issuer tries to limit or eliminate other benefits or increase cost sharing to offset the increased costs of the COVID-19 coverage.  So, step cautiously as you implement these changes so that you do not make other changes that could run afoul of these rules.

The new law and the guidance encourage more telehealth.  There is a safe harbor for high deductible health plans (HDHP) with HSAs.  Under prior law, if an individual has an HSA with a HDHP, s/he could not have any other coverage until the deductible had been met.  Now, covering telehealth without a deductible or below the regular deductible is permissible as of March 27 and applicable to plan years beginning on or before December 31, 2021.  Note that this is NOT limited to COVID-19 related telehealth and other remote care services in an effort to minimize the risk of exposure and community spread of COVID-19. If your company sponsors a group health plan, you will need to consult with your insurer to make sure your plan is amended to comply with the new laws and that appropriate communications are made in a timely manner to plan participants.

Although this update may be helpful in informing clients and others who have an interest in the subject matter, it is not intended to be legal advice. This subject matter is often complex and how it applies to any particular individual or organization may vary significantly depending on specific facts and situations. Readers should not rely on information in this update as a substitute for competent legal advice that is specific to the circumstances of the reader. The information provided herein also should not be relied upon to form an attorney-client relationship. Lawyers who contribute content to this update do not seek to practice in jurisdictions in which they are not properly permitted to do so.  Legal services may be performed by lawyers other than the lawyers contributing content to this update.

Sherry P. Porter
Sherry Porter has more than twenty years of experience in the employee benefits field.  She began her legal career as an investigator for the U.S. Department of Labor Employee Benefits Security Administration, where she conducted investigations to ensure compliance with ERISA and related laws and negotiated compliance agreements to correct violations.  Ms. Porter regularly advises clients on legislation affecting employee benefit plans, such as HIPAA privacy and security rules and the Patient Protection and... Read More