Federal Regulators Issue New Benefit Plan Guidance
On March 29, 2023, the U.S. Departments of Labor, Health and Human Services, and the Treasury (collectively, the departments) issued new guidance in the form of frequently asked questions (FAQs), Part 58, regarding the upcoming end of the COVID-19 Public Health Emergency (PHE) and National Emergency (NE) and the implementation of requirements under the Families First Coronavirus Response Act (FFCRA), the Health Insurance Portability and Accountability Act (HIPAA), and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This guidance addresses various benefit plan-related issues that will arise in connection with the end of the NE as of April 10, 2023 (sooner than initially provided in the guidance), and the expiration of the PHE on May 11, 2023. Because President Biden signed a bipartisan Congressional resolution to end the NE as of April 10, 2023 (ending the NE more than four weeks earlier than anticipated by the guidance), some of the guidance, particularly timeframes triggered by the end of the NE discussed below, may be further updated or addressed by the departments.
While the departments previously issued multiple series of FAQs related to the implementation of the FFCRA and CARES Act, the March 29 guidance aims to clarify how the end of the PHE/NE will impact the coverage and payment requirements and provides plans and issuers with examples to aid in post-PHE/NE plan administration. A more detailed summary of the guidance is included below.
COVID-19 Diagnostic Testing
At the beginning of the COVID-19 pandemic, on March 18, 2020, Congress enacted FFCRA requiring group health plans and health insurance issuers to provide certain items related to diagnostic testing, detection and prevention of COVID-19 without imposing on those benefits any cost-sharing requirements, prior authorization or other medical management requirements. Subsequently, the CARES Act broadened the range of diagnostic and prevention items that are required to be covered without such restrictions.
The FAQs confirmed that the requirements under section 6001 of the FFCRA to provide COVID-19 diagnostic testing and related items do not apply to those items and services when furnished after the end of the PHE. Further, any plan or issuer that decides to continue to provide coverage for items related to diagnostic testing and treatment of COVID-19 after the PHE ends may impose restrictions (i.e., cost-sharing requirements, prior authorization or other medical management requirements). For example, a plan or issuer may decide to no longer cover without cost-sharing any over-the-counter COVID-19 tests purchased by a participant after the PHE ends; however, over-the-counter COVID-19 tests are medical expenses generally reimbursable by health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) to the extent a cost is not covered by a plan or issuer.
The departments did, however, encourage plans and issuers to continue to provide coverage without any such restrictions, including coverage of telehealth and remote care services, and to notify participants, beneficiaries and enrollees of the key information regarding changes to COVID-19 coverage (i.e., the date the plan or issuers may implement any costs or restrictions). In providing this encouragement, the departments reiterated that the prior notice rules regarding any material modification to terms noted in the summary of benefits and coverage (SBC) provided to participants are still applicable.
Specifically, notice of any material modification to benefits not reflected in the most recently issued SBC must be provided to participants and enrollees within 60 days prior to the date on which the modification will become effective. However, if a plan or issuer previously made a material modification to increase benefits or reduce or eliminate cost sharing for COVID-19 testing or treatment or for telehealth (or other remote care services), and revokes these changes because of the end the PHE, the departments will consider the plan to have satisfied its 60-day advance notice obligation if it:
- previously notified the participant, beneficiary or enrollee of the general duration of the additional benefits coverage or reduced cost sharing (such as, that the increased coverage applies only during the PHE); or
- notifies the participant, beneficiary or enrollee of the general duration of the additional benefits coverage or reduced cost sharing within a reasonable time frame in advance of the reversal of the changes.
Finally, the departments clarified that the reimbursements and cash-price posting requirements under the CARES Act do not apply to COVID-19 diagnostic tests furnished at the end of the PHE. However, the departments once again encourage providers to continue making the cash price of COVID-19 diagnostic tests publicly available for a sufficient time (e.g., at least 90 days) after the end of the PHE.
Rapid Coverage of Preventive Service and Vaccines for Coronavirus
The CARES Act and implementing regulations required non-grandfathered plans and issuers to cover, without cost-sharing requirements, any “qualifying coronavirus preventive service” (consistent with recommendations of the U.S. Preventive Services Task Force, Advisory Committee on Immunization Practices of the CDC) within 15 days following the applicable recommendation. A “qualifying coronavirus preventive service” includes certain items, services or immunizations (emphasis added) intended to prevent or mitigate COVID-19 that meets certain federal standards. The departments confirmed that these statutory requirements related to rapid coverage of preventive services for COVID-19 continue to apply to qualifying preventive services furnished by non-grandfathered plans after the end of the PHE. For plans and issuers with a network of providers, the requirement to cover qualifying coronavirus preventive services out-of-network, or to provide such services out-of-network without cost sharing, no longer applies after the PHE ends.
Extension of Certain Time Frames for Employee Benefit Plans Subject to ERISA and the Code
In 2020, in an effort to assist plans and participants with issues in meeting certain pre-established time frames during the NE, the departments issued a joint notice (see May 4, 2020, Federal Register notice and Employee Benefits Security Administration Disaster Relief Notice 2020-01). This notice provided that, effective March 1, 2020, certain HIPAA special enrollment, COBRA continuation coverage, and internal claims and appeals and external review periods must be disregarded (i.e., tolled) when determining the due dates for certain elections and other actions by plans and/or participants in such plans, and that such relief would continue during the NE and 60 days thereafter (referred to as the “Outbreak Period”). From a plan participant’s perspective, these elections/actions included, but were not limited to, the 30-day period (or 60-day period, as applicable) for requesting HIPAA special enrollment, the 60-day election period for electing COBRA continuation coverage, the due date for making COBRA premium payments, and the time period within which individuals may file a benefit claim or appeal under a plan’s claims procedures.
Subsequently, in 2021, the departments issued a clarifying joint notice (see April 12, 2021, Federal Register Notice and Employee Benefits Security Administration Disaster Relief Notice 2020-01) that limited the relief provided in the initial 2020 joint notice to the earlier of (i) one year from the date the plan/participant was first eligible for the relief provided under the 2020 joint notice (i.e., the extended action period), or (ii) 60 days after the announced end of the NE (i.e. the end of the Outbreak Period).
In the guidance, the departments reaffirmed the duration of the Outbreak Period and anticipate that the Outbreak Period will end July 10, 2023 (60 days after the end of the NE). The departments emphasized that group health plans are not prevented from allowing longer time frames for participants to complete relevant actions, and the departments encouraged group health plans to continue to allow for longer time frames.
The departments also provided examples of how the rules operate after the end of the Outbreak Period.
- Electing COBRA
- Assume Participant A works for Employer X and participates in its group health plan. Participant A experiences a COBRA qualifying event, loses coverage on July 12, 2023, and is provided a COBRA election notice on July 15, 2023. Because the qualifying event occurred on July 12, 2023, after the end of the Outbreak Period, the extensions do not apply. The last day of Participant A’s COBRA election period is 60 days after July 15, 2023, which is Sept. 13, 2023.
- Paying COBRA Premiums
- Participant B participates in Employer Y’s group health plan. Participant B has a qualifying event and receives a COBRA election notice on Oct. 1, 2022. Participant B elects COBRA continuation coverage on Oct. 15, 2022, retroactive to Oct. 1, 2022. Participant B has 45 days after July 10, 2023 (end of the Outbreak Period), which is Aug. 24, 2023, to make the initial COBRA premium payment. The initial COBRA premium payment would include the monthly premium payments for October 2022 through July 2023 (the participant must “catch up” for coverage to be effective). Subsequent monthly COBRA premium payments would be due in normal course (first of each month, with 30-day grace period).
- Importantly the tolling relief/extensions still apply during the 60-day period between the end of the NE and the end of the Outbreak Period.
Special Enrollment Periods After Loss of Eligibility for Medicaid or Children’s Health Insurance Program (CHIP)
Group health plans are required to provide special enrollment opportunities (generally 60-day election periods) to certain individuals who were eligible for but declined coverage, due to enrollment in other coverage, and subsequently lose eligibility for that other coverage. Since the beginning of the PHE, state Medicaid and CHIP agencies generally have not terminated coverage for anyone receiving those benefits (referred to as the continuous enrollment condition). Accordingly, as those Medicaid and CHIP agencies begin to reprocess eligibility for those coverage options, employer group health plans may encounter individuals who lose Medicaid and CHIP coverage from March 31, 2023 (the end of the continuous enrollment condition) until July 10, 2023 (the anticipated end of the Outbreak Period), and who are eligible for special enrollment in a group health plan governed by ERISA and the Internal Revenue Code until the date that is 60 days after the end of the Outbreak Period.
Similar to other sections of the FAQs, the departments note that group health plans are not prevented from permitting a longer special enrollment period for these individuals and are encouraged to do so. As an example of a longer special enrollment period, the guidance describes the process that the Centers for Medicare & Medicaid Services put in place for those individuals affected by a Medicaid/CHIP loss of coverage that choose Health Insurance Marketplace coverage (or unwinding SEP). Individuals eligible for unwinding SEP can submit applications for Marketplace coverage between March 21, 2023, and July 31, 2024, and will have 60 days to select coverage once an application has been submitted.
High-Deductible Health Plans, Health Savings Accounts and Benefits for COVID-19 Testing and Treatment
In general, and in order for an individual to remain eligible to contribute to a health savings account (HSA), a high-deductible health plan (HDHP) cannot provide medical care services without cost-sharing prior to an individual’s satisfaction of the applicable minimum deductible. The departments relaxed this requirement during the PHE and NE with respect to certain COVID-19-related medical care.
The departments indicated that until further guidance is issued, an individual covered by an HDHP that provides medical care services and items for the purpose of diagnostic testing and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible may continue to contribute to an HSA. In light of the anticipated end of the PHE and NE, the departments are assessing the appropriateness of continuing this relief. However, the departments indicated that any future modifications generally will not require HDHPs to make changes in the middle of a plan year, which will avoid the need for any midyear changes in order for an individual to remain eligible to contribute to an HSA.
For further information, please contact one of the authors or any other member of McGuireWoods’ employee benefits team.
Published April 14, 2023.