As employers plan for the impact of the anticipated May 11, 2023, end of the two federal COVID-19 emergency orders, they have some important new clarity on test and vaccine coverage and on how to unwind COVID-19–era extended deadlines, including for COBRA continuing healthcare coverage elections.
This clarity comes courtesy of frequently asked questions (FAQ) guidance issued March 29, 2023, by the U.S Department of Labor (DOL), U.S. Department of Health and Human Services (HHS), and the U.S. Department of the Treasury. The FAQ guidance includes details on COVID-19 diagnostic testing, coverage of vaccines, and the extended deadlines for COBRA, special enrollments, and group health plan claims and appeals.
Two separate COVID-19 orders affect health plans. The Public Health Emergency (PHE), which has been declared and renewed by the Secretary of HHS since January 2020, affects requirements to cover COVID-19 testing and related services. And the COVID-19 National Emergency, which has been in effect since March 1, 2020, directly affects the extended deadlines. In 2021, the DOL and the Internal Revenue Service (IRS) tolled various health plan deadlines until the earlier of (a) one year from when an individual was first eligible for deadline relief, or (b) sixty days after the end of the National Emergency. Together, the COVID-19 National Emergency period, plus that sixty days, are referred to as the Outbreak Period.
Employers began to focus on these coverage changes and on winding down the deadline extensions when President Biden announced in January that he planned to declare the end of both emergency orders on May 11, 2023. The FAQ guidance states that the anticipated end of the Outbreak Period will be July 10, 2023—sixty days after the expected termination of the COVID-19 National Emergency.
Here is a summary of some of the key points from the FAQ guidance:
Diagnostic Testing
- Following the end of the PHE, health plans may—but will not be required to—impose cost-sharing requirements, prior authorization, or other medical management requirements on coverage for COVID-19 diagnostic testing, including over-the-counter tests. This is not allowed during the PHE under the Families First Coronavirus Response Act of 2020. (Q1 of the FAQs.)
- If a health plan reduces, or adds cost sharing to testing benefits after the PHE, what notice will be required? Some changes might be “material modifications,” i.e., those that an average plan participant would, along with other changes made at the same time, consider an important change in benefits. Material modifications trigger obligations under ERISA to update participants. The FAQ guidance indicates that a plan could either have provided a previous notice that indicated the “general duration” of the COVID-19–era benefits (such as during the PHE) or may provide a notice reasonably in advance of the reduction of diagnostic testing benefits or the addition of cost sharing. (Q2)
- The requirement for plans to pay the cash price of a COVID-19 test listed on an out-of-network provider’s website will no longer apply after the end of the PHE. (Q3)
Vaccinations
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, plans are generally required to cover without cost sharing vaccines or other qualified COVID-19 preventive services. Under separate regulations, plans were required to begin covering vaccines or other services within fifteen days of their approval by the relevant federal regulators. After the PHE, plans will be required to cover vaccines or other preventive services without cost sharing in network and subject to the fifteen-day rule. Out-of-network coverage, though, may be cut. (Q4)
Note, however, that a March 30, 2023, ruling from Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas potentially could complicate the preventive care rules. That ruling enjoined enforcement of the Affordable Care Act (ACA) requirement to cover preventive care items and services approved by one regulatory body, the U.S. Preventive Services Task Force, on the grounds that the task force was not properly constituted. Under the CARES Act, however, plans are also required to cover services approved by the Advisory Committee on Immunization Practices (ACIP) of the U.S. Centers for Disease Control and Prevention (CDC). This requirement is not affected by Judge O’Connor’s ruling.
Extended COBRA, Special Enrollment, and Claims and Appeals Deadlines
Under 2021 IRS and DOL guidance, as noted, health plans have been required to toll various administrative deadlines until the earlier of (a) one year from when an individual was first eligible for deadline relief, or (b) sixty days after the end of the COVID-19 National Emergency (i.e., the end of the Outbreak Period).
This means that since 2020, participants have had one year—rather than the conventional deadlines under plans and pre-COVID-19 federal law—to:
- request HIPAA special enrollment;
- elect COBRA coverage;
- pay COBRA premiums;
- notify the plan of a disability determination or a COBRA-qualifying event;
- file a benefit claim or an appeal following an adverse benefit determination;
- request an external review following an adverse benefit determination; and
- perfect a request for an external review.
Plans were also given some relief. They did not have to provide COBRA election notices for up to a year.
- Under the FAQ guidance, plans can stop tolling relevant deadlines at the end of the Outbreak Period (July 10, 2023). Deadline extensions can end sooner in cases where participants have had a full one-year extension—for example, someone who had a COBRA qualifying event and lost coverage on May 1, 2022. Deadlines that begin during the Outbreak Period would still be subject to the IRS and DOL extension. For instance, participants who have COBRA qualifying events on May 12, 2023, would have a deadline that is sixty days after the end of the Outbreak Period, which is September 8, 2023. (Q5)
- Deadline periods that begin to run after the Outbreak Period—for example, after July 10, 2023, a baby being born and eligible for special enrollment, a health plan claim being denied, or a COBRA premium payment due date—will not be subject to extension relief. The FAQ guidance emphasizes that plans are allowed to offer longer timeframes than the minimum required by law, which could ease the transition period for employers and employees. (Q5)
- Medicaid agencies generally did not terminate enrollment during the COVID-19 emergency periods, even for enrollees who lost coverage. The FAQ guidance indicates that this practice will be discontinued after March 31, 2023. This may lead to a large group losing Medicaid coverage on April 1 and potentially becoming eligible for special enrollment into employer plans if they otherwise qualify. Special enrollment periods following changes in Medicaid or Children’s Health Insurance Program (CHIP) eligibility must be at least sixty days. Individuals who lose coverage March 31 must be allowed to enroll in plans until September 8, 2023, which is sixty days after the end of the Outbreak Period (July 10, 2023). (Q6)
COVID-19 Services and HSA Relief
Under a 2020 IRS notice, a high-deductible health plan can offer pre-deductible coverage for COVID-19 testing and treatment without disqualifying participants from contributing to health savings accounts (HSAs). This HSA relief is not affected by the end of the PHE or the COVID-19 National Emergency. Also, under existing HSA eligibility rules, COVID-19 vaccinations are considered preventive care that would not disqualify participants from contributing. The FAQ guidance notes that if the relief is eliminated in the future, the departments will likely not require a mid-year change to plan coverage. (Q8)
