Employee Benefits Compliance, COVID-19

COVID-19 – How is Insurance Being Affected?

us capitol

Current as of March 18, 2020

The COVID-19 Benefits Environment

With new announcements and orders coming at employers daily, understanding what it all means, what is happening now, and what is just being “considered”, can be a challenge. Businesses in large cities, such as San Diego, Los Angeles, and New York are shutting down, including bars, restaurants, museums, libraries, and gatherings over 50 lives are banned (and that number is shrinking by the week). Schools are closed in San Diego, Los Angeles, New York, Ohio, and Washington, also growing by the week. Inevitably, employees will be laid off, furloughed, or suffer reductions in hours. How will your benefits be affected?

Executive Summary

  • Relief packages being considered by Congress [UPDATE: Passed both the House and Senate and was signed by the President] include:
    • Paid family leave (details to come separately)
    • Emergency payout to all qualified adults of $1000 – still an economic relief in consideration
    • Unemployment benefits expanded to include loss of hours due to the crisis (details to come separately)
  • Telehealth expanded through waiver of some compliance requirements, including
    • Originating site requirement
    • In identified emergency areas, permitted expansion of telehealth modalities, including beyond state lines
    • Permissions for states to relax telehealth rules


H.R.6074 – Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020

In order to better comply with the Centers for Disease Control (CDC) guidelines to refrain from congregating in groups of ten or more, less if in the high-risk group, encouraging the sick from going to the hospitals and doctor’s offices and the emergency room, telehealth has been one of the tools most leaned on. With this, expansions of the rules and waivers of some laws for the emergency was first seen in HR 6074. While most of these rules apply to Medicare, Medicaid, and Children’s Health Insurance Programs (CHIP), with the expansion of similar rules wherever the Trump Administration has authority, may be foreboding, although a welcome one.

On March 17, 2020, Centers for Medicare & Medicaid Services (CMS) released guidance expanding telehealth for programs governed by CMS and the Federal government (e.g., Medicare, Medicaid, Federal Exchange qualified plans and CHIP). Specifically:

  • Permitted out-of-state services for telehealth in emergency areas
  • Permit telehealth for office, hospital visits, and other services that otherwise occur in-person
  • Coinsurance, co-payments are still required for services other than COVID-19 services

Prevention, Testing, Treatment, and Co-insurance, Co-pays, Deductibles … and more?

American Health Insurance Plans (AHIP) issued a statement on how the private insurance carriers were going to treat insurance in the COVID-19 times. Highlights include:

  • Testing would be covered with no deductible, co-pays, co-insurance, or prior authorizations
  • Under a variety of permitted reasons, including, preventive care and the latest legislation allowing use of the High Deductible Health Plan (HDHP) without meeting the deductible

CMS released guidance for the Individual and Small Group market Insurance Coverage to explain how COVID-19 fits into the typical health insurance plan coverages. (Additional FAQs were released on essential health benefits.) But the federal government has little authority to force the private insurance market to do anything. What we have seen is a great willingness to cover any costs for COVID-19 testing, treatment, and related co-pays, etc. With the impending relief package working its way through Congress, there will be (hopefully) additional PFL and economic relief. Employers should keep in mind that aside from these direct issues discussed here, the typical compliance rules apply. Including:

  • A reduction in hours can trigger a COBRA Qualifying Event
  • FMLA and other state laws may apply to provide workers (unpaid leave in most cases) to care for a child or loved one with COVID-19 or to care for a child out of school
  • A reduction in hours will trigger a qualifying event to change the election coverage. This is permissive and not mandatory (although most common to allow)
  • Benefits must still be offered to the full-time employee if in the Affordable Care Act’s ACA) stability or offer period, even if not working 30 hours or more

The environment is changing quickly and what is today won’t be tomorrow. Be sure to read the compliance alerts that are intended to notify you of these changes.

Bills In Consideration

Safeguarding Americans from Epidemics (SAFE) at Work Act of 2020 (HR 6219)
To amend the Internal Revenue Code of 1986 to allow a credit against tax for telework, and for other purposes. 

Emergency Family and Medical Leave Expansion Act (HR 6220)
To amend the Family and Medical Leave Act of 1993 to provide for leave with respect to a public health emergency, and for other purposes. 

Paid Sick Leave Credit Act of 2020 (HR 6221)
To allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave. 

Ensuring Affordable COVID-19 Preventive Care Act of 2020 (HR 6222)
To amend title XXVII of the Public Health Service Act to provide for coverage of items, services, and immunizations relating to the diagnosis or treatment of COVID-19 under group health plans and health insurance coverage within 15 days of the issuance of a recommendation from the United States Preventive Services Task Force or the Advisory Committee on Immunization Practices. 

Ensuring Affordable COVID-19 Preventive Care Act of 2020 (HR 6231)
To ensure affordable coverage of certain vaccines and testing services under group health plans and group and individual health insurance coverage during the COVID-19 public health emergency. 

HR 6245
To prohibit the Secretary of Labor from implementing or enforcing the final rule on joint employer status. 

HR 6254
To require the Securities and Exchange Commission to extend exemptions for securities offered as part of employee pay to other individuals providing labor or services for remuneration, to temporarily preempt certain provisions of State law with respect to wage rates and benefits, and for other purposes. 

Public Service Retirement Fairness Act (HR 6257)
To modify rules relating to 403(b) plans. 

S 3476
A bill to provide for unemployment benefits to workers affected by the 2019 Novel Coronavirus. 

S 3494
A bill to provide for temporary financing of short-time compensation programs. 

S 3496
A bill to provide for Federal financing of short-time compensation programs during public health emergencies. 

Free COVID-19 Testing Act (S 3499)
A bill to amend coverage requirements to ensure that no person incurs cost-sharing when receiving a test to confirm a COVID-19 infection. 


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.