Employee Benefits Compliance

How the End of the National and Public Health Emergencies Will Impact Health Plans

Update: President Biden signed legislation on Monday, April 10, 2023, announcing the end of the National Emergency on April 11, 2023, instead of the originally planned and announced date of May 11th. See the prior Leavitt Group article How the End of the National and Public Health Emergencies Will Impact Health Plans | Leavitt Group News & Publications. 

This latest development to end the National Emergency a month earlier follows Congressional bipartisan actions voting to terminate the National Emergency earlier despite President Biden’s opposition. The change to terminate the National Emergency a month early does not impact the unwinding of the Public Health Emergency (PHE), which is a separate set of rules. See the Department of Health and Human Services (HHS) Fact Sheet on COVID-19 PHE Transition Roadmap.

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On January 30, 2023, the Biden Administration announced its plan to end the COVID-19 National Emergency (NE) and Public Health Emergency (PHE) on May 11, 2023. Many plan sponsors, health plans, insurers and state-run programs (e.g., Medicaid and Childrens’ Health Insurance Program (CHIP)) were impacted by the existence and timing of the NE and PHE. Employer-sponsored health plans have been required to comply with certain coverage requirements and experienced deadline tolling during the COVID-19 emergency periods, including the rules and mandates in the chart below.

This article provides highlights of the employee benefits rules impacted by the expiration of the NE (and related Outbreak Period) and PHE. Further analysis will come over the coming months as the regulators and our in-house compliance department breaks down rules and clarifies the specific compliance requirements. Be sure you are signed up to receive these analyses as they are released by subscribing to our alerts and webinar/seminar invitations.

COVID-19 Emergency Periods Defined

Public Health Emergency (PHE)
Declared by the Department of Health & Human Services on 1/31/20 following the initial COVID-19 outbreak, the PHE is set to expire by Presidential Order on 1/30/23 on May 11, 2023.

National Emergency (NE)
Declared by the Trump Administration in March 2020, the NE is set to expire by Presidential Order on May 11, 2023.

Outbreak Period
The COVID-19 Outbreak Period (OP) ends 60 days after the end of the NE. The NE ends on May 11, 2023, therefore the OP ends on July 10, 2023. The OP timing is relevant to compliance of some plan deadlines or procedures. See chart below for details.


Rules Impacted

Coverage Mandates

Health plans were required to cover COVID-19 diagnostic tests, vaccines and treatments without imposing any cost sharing (such as deductibles, copayments or coinsurance) during the PHE. See the prior Leavitt Group article. When the PHE ends, the following health plan coverage rules related to the COVID-19 pandemic will no longer apply:

  • COVID-19 Diagnostic Testing Without Cost Sharing—During the PHE, health plans and health insurance issuers must cover COVID-19 tests and related services without imposing any cost sharing or prior authorization or other medical management requirements.
    • As of Jan. 15, 2022, this coverage requirement extends to at-home COVID-19 diagnostic tests.
    • Health plans and issuers will no longer be required to provide this first-dollar coverage when the PHE ends.
      • Plans will still be required to cover COVID-19 immunizations without cost-sharing – see below.
  • COVID-19 VaccinesOut-of-Network Providers—Non-grandfathered group health plans and health insurance issuers must cover coronavirus preventive services, including recommended COVID-19 immunizations, without cost sharing requirements.
    • During the PHE, covered services may be provided by in-network or out-of-network providers.
    • Once the PHE ends, health plans and issuers must continue to cover recommended COVID-19 immunizations without cost sharing but can limit this coverage to in-network providers.
  • Standalone Telehealth Benefits—For plan years beginning during the PHE, a large employer (more than 50 employees) may offer standalone telehealth benefits and other remote care services to individuals who are not eligible for coverage under any other group health plan offered by the employer without violating the Affordable Care Act’s market reforms.
    • These types of standalone arrangements will not be permitted after the PHE ends.
    • Telehealth coverage that is compatible with HDHP/HSA will still be permitted as part of the health plans. See below section on telehealth.

Deadlines Tolled / Extended During the Outbreak Period

During the COVID-19 Outbreak Period (OP), which is tied to the National Emergency, certain health plan deadlines are extended (see the prior Leavitt Group article “Relief for COBRA, Special Enrollment, and Other Timeframes During COVID-19 Outbreak”) by tolling or not counting the outbreak period (which is the national emergency plus 60 days after its’ end). Timeframes or deadline not counted during the OP include:

  • HIPAA Special Enrollment—The 30-day period (or 60-day period, if applicable) to request special enrollment. This means that there was essentially no 30- or 60-day deadline to make a special enrollment election during the OP.
  • COBRA Notice and Premium Payment Deadlines—The 60-day period to elect COBRA coverage; the date for making COBRA premium payments (generally at least 45 days after the day of the initial COBRA election, with a grace period of at least 30 days for subsequent premium payments); and the date for individuals to notify the plan of a qualifying event or disability determination (generally 60 days from the date of the event, loss of coverage or disability determination). See the prior Leavitt Group article “Clarification on COBRA Deadline Tolling Period During COVID-19 Outbreak Period”.
    • All of these deadlines were tolled during the OP. Once the NE expires and the OP over (on July 10, 2023) elections will come due as if the clock just started again.
  • Claims and Appeals Deadlines—The deadlines to file a benefit claim, file an appeal of an adverse benefit determination or request an external review of a claim under the plan’s claims and appeals procedures were all tolled.

Under the relief, these deadline extensions end when the outbreak period is over or, if earlier, after an individual has been eligible for a specific deadline extension for one year.

Pre-Deductible Telehealth Coverage Compatibility with High-Deductible Health Plan (HDHP) with Health Savings Accounts (HSA) Not Impacted By These Emergency Order Changes

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security (CARES) Act allowed HDHPs compatible with HSAs to provide benefits for telehealth or other remote care services before plan deductibles were met. This relief was not linked to the PHE or outbreak period; rather, it applied for plan years beginning before Jan. 1, 2022. A spending bill extended this relief to telehealth services provided in months beginning after March 31, 2022, and before Jan. 1, 2023.

The Consolidated Appropriations Act, 2023 (CAA), which was signed into law on Dec. 29, 2022, extends the ability of HDHPs to provide benefits for telehealth or other remote care services before plan deductibles have been met without jeopardizing HSA eligibility. This extension applies for plan years beginning after Dec. 31, 2022, and before Jan. 1, 2025. Thus, regardless of when the COVID-19 emergency periods end, HDHPs may be designed to waive the deductible for any telehealth services for plan years beginning in 2023 and 2024 without causing participants to lose HSA eligibility.


Background

As the COVID-19 pandemic began its’ takeover of the US, Congress, regulatory agencies such as the Departments of Health and Human Services (HHS), Labor, state regulatory agencies and the Executive branch began issuing emergency declarations, each of which has different requirements, authorities, jurisdiction and impacts related to expiration of the NE, OP and PHE. Below is a background for the federal orders and declarations (see charts for impact on rules). For summaries and analysis of state laws, see the National Council of State Legislatures (ncsl.org)

Public Health Emergency (PHE)

  • Initially declared by the Secretary of the Department of Health and Human Services (HHS) in late January 2020, pursuant to Section 319 of the Public Health Service Act.
  • A PHE lasts for 90 days and must be renewed to continue; the PHE for COVID-19 has been renewed several times, most recently in January 2023, and is currently scheduled to expire in mid-April 2023.
  • The Biden Administration has said that it will give states a 60 day notice before the PHE expires.

National Emergency (NE)

Issued by former President Donald Trump in March of 2020, pursuant to Section 201 of the National Emergencies Act.

A national emergency declaration is in effect unless terminated by the President, or through a joint resolution of Congress, or if the President does not issue a continuation notice annually. Such a notice was issued by President Trump to continue the emergency beyond March 1, 2021 and by President Biden to continue beyond March 1, 2022.

Public Readiness and Emergency Preparedness (PREP) Act

Pursuant to Section 319F-3 of the Public Health Service Act, PREP declaration was issued by the Secretary of HHS in March 2020. This declaration provides liability immunity for activities related to COVID-19 medical countermeasures. Since then, 10 amendments to the declaration have been issued to extend liability protections related to COVID-19 countermeasures. For a PREP Act emergency determination, the Secretary must specify an end date; in this case, it has been set as October 1, 2024 in most cases (although there are some exceptions).


Conclusion

Plan sponsors must continue to run their plans as they have until the expiration date of May 11, 2023 for some and July 10, 2023 for other provisions (as indicated above). It is recommended that plans prepare for the unwinding of the rules ahead of those dates. Consult with your trusted Leavitt Group advisor to determine the action items applicable to your plans. Leavitt Group provides a checklist of items and to-do lists for our clients to ensure compliance in the ever-changing compliance landscape.

What about Notice?

Plans are encouraged to notify participants of any changes to the terms of the plan’s coverage wherever the changes are “materials modifications”, or significant. This could mean needing to provide updated summary of benefits and coverage (SBC) no later than 60 days before the modification’s effective date (for a change date of July 10th, that would be mean a May 10th deadline to notify of the upcoming change).  It is most common, that plans provided advanced notice of the temporary nature of the benefits or reduced cost-sharing for COVID-related items and services. In those cases, it is not mandatory, but is advised to provide notice of the change soon to occur ahead of the impact date.

ERISA requires that a “Summary of Material Modification” (SMM) be provided to plan participants no later than 60 days after (versus above where it is 60 days before) adoption of a material reduction in a plan’s covered services or benefits.

Need Help?

Be sure you are subscribed to the Leavitt Group news alerts to be kept abreast of the changes in the law and the unwinding of the rules. Leavitt Group will be providing additional analysis of the action items suggested when the deadlines end and compliance requirements flowing from the change in rules. Or, contact your local Leavitt Group Trusted Advisor!

Contributors: Lisa Nelson, Esq., Vice President of Compliance & Regulatory Affairs and Zywave, Inc., portions republished with permission.