In response to the COVID-19 pandemic, Congressional legislation and insurance carrier programs have been implemented at a fast and furious pace, having an immediate impact on group health plans. With these abrupt and far-reaching changes, it’s important for employers and group health plans to consider not only the direct impact on their plans, but also how these new rules may interact with other aspects of their employee benefit offerings.
Health Plan Changes Required under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security (CARES) Act
First, let’s review the mandated changes as a result of these two new pieces of legislation:
- Requires all health insurers and group health plans to cover all COVID-19 testing and related services with no employee out-of-pocket cost (no deductibles, copays, coinsurance).
- Requires coverage of the preventive service or vaccine for COVID-19 with no employee cost-sharing within 15 days of being recommended by the applicable government agency (there is generally a 1-year lag between the recommendation and requirement).
Expanded Use of Over-the-Counter (OTC) Expenses
- Allows OTC expenses as eligible medical expenses for purposes of health savings accounts (HSA), flexible spending accounts (FSA), health reimbursement accounts (HRA), and medical savings accounts (MSA) without requiring a prescription. This reverses a limitation imposed by the Affordable Care Act.
- Expands allowable medical expenses to include menstrual care products.
Telehealth and HSAs
- Allows telehealth and virtual care services to be provided prior to satisfying plan deductible requirements, and the IRS has certified that the health plan will NOT fail requirements of being a qualified high-deductible plan (and therefore HSA-eligible).
- This includes not only COVID-19 related services, but telehealth services for any reason can be included under this provision (at the carrier’s discretion). If COVID-19 test is part of the visit, it must be covered 100% with no employee cost-sharing.
- This provision will be in effect for all plan years beginning on or before December 31, 2021.
Other Health Plan Changes Due to COVID-19
Fully Insured Plans
- Plan design changes as required by the FFCRA and CARES Act are automatically implemented for fully-insured plans. Beyond the mandated changes, there are some additional benefits that certain insurance carriers are adding in response to the pandemic:
1 – Some carriers have expanded telehealth and virtual visit services at no cost-sharing to include all services, although generally for a short period of time (for example, through May 31st).
2 – Some carriers have also expanded coverage for ALL COVID-19 related services, waiving employee cost-sharing (no deductibles, copays or coinsurance) not only for testing, but for all in-network treatment services (including inpatient expenses).
It is recommended that groups contact their insurance carrier to determine what benefits might have been expanded on their plan and coordinate any necessary employee outreach or communication with the carrier.
- While the insurance carrier makes the decision to expand coverage beyond what the regulations require for fully insured plans, self-funded employers will have to make their own decisions as to whether to expand coverage for the following (which have been expanded in full or in part by many carriers), and over what time period will these be covered:
1 – Will the plan expand telehealth services with no employee cost-sharing to include ALL services for a period of time, and
2 – Will the plan waive all employee cost-sharing for ALL expenses related to COVID-19, including expenses for treatment (including inpatient expenses)?
It is recommended that self-funded health plans understand the benefit plan initiatives that are available to them and examine the considerations in approving these initiatives for their plans, including potential costs, benefits and messaging to employees, preventive aspects to the member population, and equity of initiatives.
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Our health and welfare compliance updates are designed to provide useful information to organizations about the operation and management of their employee benefit plans. Although we go to great lengths to ensure that only accurate and timely information is provided, we recommend that you consult with an attorney for professional assurance that our information, and your interpretation of it, is appropriate for your particular situation. Nothing provided herein should be construed as legal or tax advice.