COVID-19, Employee Benefits Compliance, Grandfathered Plans, Health Insurance Marketplaces, HRAs & HSAs, Large Employers, Laws, Regulations & FAQs

COVID-19 FAQs Address Wellness, Mental Health Parity, Grandfathered Status & More

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Current as of 7/20/2020

Executive Summary

The Departments of Labor, Health and Human Services and Treasury released another round of Frequently Asked Questions (FAQ) related to the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief and Economic Security Act (CARES).  Highlights of FAQ Part 43 further clarify the rules around FFCRA which generally requires group health plans and insurers (including self-funded plans) to cover certain items and services related to diagnostic testing and diagnosis of COVID-19. Additionally, the CARES Act requires coverage of a broader range of this coverage mandated in FFCRA and requires reimbursement of providers based on the cash price listed by the provider on a public website or lower negotiated rate. See below on how FAQ 43 builds upon this previous guidance. See the Leavitt Group article on previous FAQs and FFCRA and the CARES Act.

What’s Changed?

Diagnostic Testing

Question / Answer (Q/A) #2 – Reimbursable Tests.

Q: How can a Plan determine which COVID-19 tests are required to be covered under FFCRA?

A: All diagnostic tests that must be reimbursed including those that received a Food and Drug Administration (FDA) emergency use authorization and those laboratories that have notified the FDA that they have validated and begun offering their own test. See the FDA website for those labs.

Q/A #4 – At-Home Tests.

Q: Are Plans required to cover COVID-19 tests intended for at-home testing?

A: Must be covered if primarily for individualized diagnosis and treatment.

Q/A #5 – Workplace Testing.

Q: Is COVID-19 testing for surveillance or employment purposes required to be covered?

A: Testing for health and safety (e.g., return-to-work and other workplace safety programs) is beyond the scope of FFCRA and is not required to be covered by the insurer, as it is not primarily intended for individualized diagnosis and treatment of COVID-19, rather, intended to ensure workplace safety. Costs related to workplace safety are to be absorbed by the employer.

Summary of Benefits and Coverage (SBC)

Q/A #13 – SBC Notice of Coverage Change.

Q: FAQ 42 discusses temporary enforcement relief that allows Plans to make changes to increase benefits or reduce or eliminate cost-sharing for the diagnosis and treatment of COVID-19 or for telehealth. Plans are permitted to do so more quickly that ordinarily permitted under current law. May a Plan revoke these changes upon expiration of the public health emergency without satisfying the advance notice requirements for Summary of Benefits and Coverage (SBC) notices? The SBC advance notice rule mandates providing 60-days advanced notice of a material modification of the Plan.

A: Prior guidance permitted plans and insurers to modify the plan to provide above-mentioned coverage for diagnostic testing and treatment without providing the mandatory 60-day advanced notice to enrollees of a material modification to the plan. An updated SBC should be sent to participants notifying them of the material change to the plan, typically. This Q/A states that if a plan or insurer reverses the decision once the COVID-19 emergency ends, no other notice is required to address the temporary material modification – if having previously notified enrollees of the duration of the additional coverage for COVID-19-related costs, or if the plan or insurer notified within a reasonable period of time in advance of the notice of reversal of the coverage expansion.

Out-of-Network Coverage

Q/A #9 – Balance Billing for Tests Prohibited.

Q: Does the CARES Act protect participants from balance billing for COVID-19 testing?

A: Providers will be reimbursed either a negotiated rate or the publicized cash price. In either case, the amount the plan or insurer reimburses the provider constitutes payment in full with no cost-sharing to the individual or other balance due.

Q/A #12 – Out-of-Network Provider Reimbursement.

Q: If an individual receives COVID-19 testing in an emergency department of an out-of-network hospital, how do the CARES Act requirement interact with the ACA?

A: Rule in CARES Act supersedes the Affordable Care Act’s (ACA) requirement to pay the greatest of three amounts. Rather, plan and insurer will reimburse negotiated lower rate or listed cash price. For other out-of-network services, the ACA Payment Standard still applies.

Telehealth

Q/A #14 – Telehealth Exempt from Certain Group Market Reforms.

Q: In light of the COVID-19 pandemic, may a large employer offer coverage only for telehealth and other remote care services to employees who are not eligible for any other group health plan offered by the employer?

A: For the duration of the plan year beginning before the end of the COVID-19 emergency, large employers (51 or more employees [or 100 or more in California]) telehealth coverage is exempt from the following mandates:

    • Prohibition on annual and lifetime limits
    • Preventive services mandate

The following group market reforms continue to apply to telehealth coverage:

    • Prohibition on pre-existing condition exclusions
    • Discrimination based on health status
    • Prohibition on rescissions
    • Application of mental health parity requirements

Grandfathered Status

Q/A #15 – Grandfathered Status.

Q: If a grandfathered Plan makes changes to the Plan related to COVID-19 or telehealth, will the plan lose its grandfathered status solely because it reverses these changes upon the expiration of the COVID-19 emergency period?

A: Plans or insurers that modified cost-sharing pursuant to FAQ Part 42, during the COVID-19 emergency, will not lose grandfathered status.

Mental Health Parity

Q/A # 16 – Mental Health Parity.

Q: When performing the “substantially all” and “predominant” tests for financial requirements and quantitative treatment limitations under the MHPAEA regulations, may plans and issuers disregard benefits for items and services required to be covered without cost sharing under FFCRA?

A: Plans and insurers may disregard items and services required to be covered without cost-sharing under FFCRA. Specifically, as it relates to calculating compliance with the Mental Health Parity “substantially all” and “predominant” tests used to determine financial parity and quantitative treatment limitation of the plan.

Wellness Programs

Q/A #17 – Wellness Programs May Waive Standard for Reward.

Q: May a plan or issuer waive a standard for obtaining a reward (including any reasonable alternative standard) under a health-contingent wellness program if participants or beneficiaries are facing difficulty in meeting the standard as a result of circumstances related to COVID-19?

A: Plans may waive the standard or reasonable alternative for obtaining a reward under a health-contingent wellness program.

Individual Coverage Health Reimbursement Arrangements (ICHRA)

Q/A #18 – Consider Notice Requirement if Using an ICHRA during COVID-19 Emergency.

Q: What are the potential consequences of delaying the individual coverage HRA notice to the extent permitted by EBSA Notice 2020-01?

A: ICHRA rules require plans to provide a notice 90-days before enrollment explanation consequences and special rules for enrollment in an ICHRA. Pursuant to EBSA Notice 2020-01, the notice otherwise furnished between March 1, 2020 and 60 days after the announced end of the COVID-19 National Emergency, generally may be furnished as soon as administratively practicable under the circumstances. This FAQ encourages employers affected by the COVID-19 emergency to consider whether they can provide the notice early enough in advance of the first day of coverage in the ICHRA to allow an informed decision for the employee. See the Leavitt Group article on the ICHRA option and notice.

Conclusion

The evolution of the rules around COVID-19 and their effect on employer -plan sponsors continues. Employers should review the FAQ to ensure they understand the clarifications and new rules.

  • Self-funded plan sponsors considering how the notice requirements, delays, changes, and mandates apply, in light of the mandate to the offer free COVID-19 testing and diagnosis, are encouraged to read these FAQs fully.
  • FAQ #5 addressing workplace testing for COVID-19 applies to all employers.

All plan sponsors should become familiar with these rules, as the COVID-19 regulations are applicable to insurers administering insured plans, as well. This relief applies immediately.


This is not intended or provided as legal or tax advice. Consult your legal professional to ensure compliance with all applicable dates in this ever-changing environment.

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