By Liliana Salazar and Cory Jorbin
Things got a lot more complicated in 2020 for employers, their workforce and the business of staying ahead of employee benefits strategies, never mind complying with applicable rules and regulations during a period of rapid change.
The COVID-19 pandemic was a major impetus for adjustments to regulations that affect all types of employee benefit plans. It’s important to gain clarity on these changes to charter a new compliance strategy. Major changes to be aware of include:
- CARES Act- Coverage of COVID-19 testing and COVID-19 antibody testing and preventative care (mandated)
- What tests: Under the first economic stimulus bill in response to the pandemic, all plans must cover COVID-19 and antibody testing for COVID-19, without cost-sharing. Neither prior authorization nor medical management are required. Other tests can be covered if the provider considers them necessary to determine if a COVID-19test is appropriate. Tests can be provided in a traditional or non-traditional (e.g. drive-through) setting. COVID-19 vaccines will also be covered when they become available.
- Cost: No cost for plan participants when testing meets medical requirements. Testing for employment reasons is not included. Cost to the plan is the negotiated rate for in-network provider; for out of network providers it is the amount posted or the amount the plan negotiates with the out-of-network provider.
- CARES Act, telehealth and high deductible health plans (optional)
- High deductible health plans (HDHPs) may waive the deductibles for telehealth without affecting their HDHP status.
- When: Plan years beginning on or before December 31, 2021.
- What: Telehealth may be used for any condition, not just COVID-19.
- Significance: Even if plan members’ telehealth visits are covered before their deductibles are met, they won’t lose their HSA contribution eligibility. This validates the practice by many vendors to waive deductibles for telehealth visits and encourages safe health practices to help reduce the spread of the virus.
- Your next move: Issue an SMM about this plan change, especially if your plan is self-insured. Note that self-insured plans are not required to cover telehealth services at no cost – just COVID-19 screening.
- CARES Act and reimbursements for over-the-counter drugs and women’s products (optional)
- Flexibility has been added to expense reimbursements by FSAs, HSAs, HRAs and Archer MSAs.
- What: Allowable expenses have been permanently expanded to cover over-the-counter medications without a prescription, and menstrual care products.
- When: This applies to amounts paid after Dec. 31, 2019. Plans can adopt this change retroactively to the beginning of the plan year, or as early as January 1, 2020.
- Your next move: Amend the plan documents and summary plan description, if the employer wants to adopt these changes and communicate the changes to employees enrolled in the HRAs and FSAs. Employees with HSAs are responsible for their own accounts, but changes can be communicated to them, as well.
- COBRA changes may have significant impact on employers (mandated)
- Extended election and payment deadline: Under this change, the period beginning March 1, 2020 is known as the “outbreak period” and is disregarded in determining the applicable COBRA election and payment deadlines. The outbreak period must end no later than February 28, 2021 but may end sooner. This means that COBRA QB will have longer period to elect COBRA and pay for their COBRA premiums.
- Coverage can be canceled pending election or payment but must be reinstated retroactively to the date COBRA coverage is elected and COBRA premiums are paid.
- HIPAA Special enrollment rights- Expanded timeframes (mandated change)
- Similarly, the outbreak period is disregarded for purposes of status changes that fall under HIPAA special enrollment rights. The required window for reporting loss of other coverage and acquisition of a new dependent is 30 days for each, and eligibility for state assistance, 60 days. These timeframes are expanded to include the end of the outbreak period plus 30 or 60 days.
- ERISA claims procedures and COVID-19 (mandated change)
The current regulations remain in place on timing of initial claim filings, denied claim appeals, external review determinations, and the submission of additional information for claim appeals. These are, respectively, 12 months, or as plan allows; within 180 days of denial; four months after notice of denial; and within for months of denial or 48 hours of notice being granted. Due to the COVID-19 pandemic the outbreak period is not included in determining if the claim was filed or appealed on a timely basis. Employers should proceed to prepare and distribute a Summary of Material Modifications to make plan participants aware of the new ERISA claims procedure guidelines.
- Mid-year election year changes expanded (optional)
Cafeteria plan-permitted election changes are expanded for employer sponsored health plans, Health FSAs and Dependent Care FSAs. These are not required, and some all or none may be adopted.
Employers interested in adopting one or more of the following changes in their Cafeteria plan, Health Care and/or Dependent Care Spending Account should proceed to amend their plan documents to identify the changes they will allow employees to make. Note that if the medical plans are insured, the employer should first consult with their carrier(s) to determine if carriers will allow employees to add or drop dependents or coverage mid-year. If the plans are self-insured, the employer should consult with the stop-loss carrier to determine if mid-year additions or deletions of coverage will be permissible. Once those changes are approved by the carriers or stop-loss providers, employers should proceed to amend their plan documents and notify employees of the changes they will allow, and the timeframes employees will have to make changes to their elections.
Having a clear understanding of which COVID-19 changes are mandated versus optional, allow employers to administer their plans more effectively. Employers should also carefully monitor COVID-19 developments, as the end of the outbreak period will result in the exhaustion of extended periods of time under HIPAA Special Enrollment Rights, COBRA and ERISA Claims procedures.
HUB International’s Compliance Officers are prepared to help you with any benefits compliance and COVID-19 related questions as well as navigate the regulatory environment that can impact your human resources and benefits management.