Implications Of The End Of The COVID National Emergency For Group Health Plans

The government has announced that it intends to end the declaration of a national public health emergency related to the COVID-19 pandemic effective May 11, 2023.  This means that effective on May 11, 2023, group health plans will no longer be required to provide certain coverage for COVID-19 diagnosis and testing.  In addition, the extensions of time granted to individuals and plans to take certain actions will expire 60 days after the end of the national emergency on July 10, 2023.

This article will highlight provisions that will no longer be in effect as well as some that will continue beyond the end of the national health emergency.

Provisions That Are Terminating

Coverage for COVID-19 Diagnosis and Testing

The Families First Coronavirus Response Act (the FFCRA) was enacted on March 18, 2020, followed quickly by the enactment of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) on March 27, 2020.  Together, these acts required all group health plans (including grandfathered plans) to provide coverage for COVID-19 diagnosis and testing (including tests intended for in-home testing) without imposition of any cost-sharing requirements, prior authorization, or other medical management requirements with respect to those items and services.  The requirements extended to services provided by out-of-network providers and included a formula for determining reimbursement rates for such providers.

This requirement will expire on May 11, 2023.

Action Items: Plan sponsors may wish to consider whether to modify plan benefits consistent with the end of the public health emergency.  Plans that reduce benefits should consider the action items under the heading SBC Non-Enforcement Policy below.

SBC Non-Enforcement Policy

The ACA requires plans to issue a new Summary of Benefits and Coverage SBC 60 days in advance of any change in benefits.  Compliance with this provision would be impossible for any plan changes required by the FFCRA and CARES Act given that they were effective immediately upon enactment.  Accordingly, the government announced that it would not take enforcement action against any plan that increased benefits to comply with the Acts without updating their SBCs in advance provided that they gave notice of the change as soon as reasonably practicable.

This non-enforcement policy will also apply to any revocation of benefits that a plan was required to add by the Acts if, when it initially notified the participants of the changes it also notified them of the general duration of the increase in benefits; for example, by stating that the increase in benefits only applied for the duration of the COVID-19 public health emergency.  Plans that did not initially provide notice of the general duration of the COVID-19 benefits will need to notify participants of any intended reduction in benefits within a reasonable time frame in advance of the change.

Action Items: Plans that reduce benefits as permitted by the end of the public health emergency should consider whether they need to issue new SBCs.  Regardless of the SBC requirements, plans should remember that a summary of material modifications is required no later than 60 days after the date a material reduction in benefits is adopted.

Plans Offering Only Telehealth and Remote Service

The government permitted large employers (as defined by the ACA) to offer group health plans that cover only telehealth and remote services to employees who are not eligible for any other group coverage sponsored by that employer.  Absent this, such plans would have been subject to all of the group market reforms under the ACA and other mandated benefits.

The exception for such a plan expires with end of the plan year that began during the public health emergency (i.e. between May 11, 2022 and May 10, 2023).

Action Items:  Employers that sponsor such plans should begin taking steps to terminate them as of the end of the plan year.

Extensions of Time for Plans and Participants

Pursuant to pre-COVID statutory authority, the Departments of Labor and Treasury had the authority to extend timeframes applicable to group health plans and plan participants.  The statute generally provides that, in the event of a Presidentially declared disaster, the Secretaries of Labor and the Treasury may prescribe a period of up to one year that may be disregarded in determining the date by which a plan or participant is required or permitted to take action under ERISA or the IRC. The Departments exercised that authority in response to the pandemic.  The Department of health and Human Services, which regulates non-federal governmental plans and health insurance issuers, exercised enforcement discretion to provide similar relief to plan and participants under its jurisdiction.

The following areas were affected by the extensions:

• Requests for special enrollment.
• The 60-day election period for COBRA.
• The date for making COBRA premium payments.
• The date for individuals to notify a plan of a qualifying event or a determination of disability.
• The date for individuals to file a claim for benefits.
• The date for claimants to file an appeal of an adverse benefit decision.
• The date for claimants to file a request for external review of an adverse benefits decision.
• The date for plan administrators to provide COBRA qualifying event notices.

These extensions will expire on July 10, 2023.

Action items:  Plans should prepare for the return of the pre-COVID timeframes for the affected areas.  Plans should be sensitive to the fact that many individuals who may have been taking advantage of these extensions will no longer will be able to do so as of July 10, 2023.  The Departments have strongly suggested that failure to give fair notice to these individuals may be a breach of fiduciary duty.  For example, in EBSA Disaster Relief Notice 2021-01, the EBSA observed that:

where the plan administrator or other responsible plan fiduciary knows, or should reasonably know, that the end of the relief period for an individual action is exposing a participant or beneficiary to a risk of losing protections, benefits, or rights under the plan, the administrator or other fiduciary should consider affirmatively sending a notice regarding the end of the relief period. Moreover, plan disclosures issued prior to or during the pandemic may need to be reissued or amended if such disclosures failed to provide accurate information regarding the time in which participants and beneficiaries were required to take action, e.g., COBRA election notices and claims procedure notices.

Employers should take steps to determine whether their notices need to be amended and to ensure that they (or their COBRA and claims administrators) are alerting affected individuals to the impending end of the applicable extension periods.

Provisions That Are Continuing

Rapid Coverage of COVID-19 Vaccines

The ACA requires non-grandfathered plans to cover preventive care without cost-sharing; this includes qualifying preventive services and immunizations specified by the USPSTF and ACIP.  COVID-19 vaccines meet the definition of preventive care.  In general, plans are required to begin covering preventive services for plan years that begin on or after the date that is one year after the date the recommendation or guideline is issued.  However, the CARES Act provided for an accelerated coverage date for qualifying coronavirus preventive services; coverage must be provided no later than 15 business days following an applicable recommendation.

This requirement does not expire with the end of the public health emergency.

COVID-19 Testing and Treatment by HDHPs

The IRS has permitted HDHPs to cover medical care services received and items purchased associated with testing for and treatment of COVID-19 without application of the deductible or using a deductible lower than that otherwise required of HDHPs.

This provision will remain in effect until further guidance is issued.  By statute, HDHPs will continue to be able to pay for vaccines on a pre-deductible basis.

The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice. As always, for specific questions concerning your health and welfare plan, or for help in operating your plan during the current COVID-19 crisis, please consult your own ERISA attorney or professional advisor.