By: HUB’s EB Compliance Team

Update April 28, 2023: This piece has been updated to reflect revised analysis regarding the end of the COVID-19 National Emergency.

On March 29, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) jointly issued FAQs focused on the end of the COVID-19 Public Health Emergency and National Emergency that are both scheduled to end on May 11. HUB previously discussed the effects of these here. The FAQs break little new ground but do provide some flexibility for health savings accounts (“HSAs”). While there are reports that the National Emergency ended early, that was a separate declaration that does not impact the FAQ guidance.

Coverage Items

Plans are not required to cover COVID-19 testing without cost-sharing, prior authorization, or medical management techniques after May 11. This includes over the counter tests. Therefore, plans are fee to charge for COVID-19 tests that are administered after that date. However, the Departments encourage plans to continue to cover them. Additionally, plans are not required to reimburse out-of-network providers at their posted cash price for COVID-19 testing.

By contrast, plans must continue to cover COVID-19 vaccines and their administration after May 11 on an in-network basis. Coverage for vaccines must still be effective 15 business days after the date it is recommended by the relevant governmental recommendation panels. However, after May 11, plans with a network for providers will not be required to cover COVID-19 vaccines and administration on an out-of-network basis. Plans with no network of providers must treat all COVID-19 vaccines and administration as in-network.

HDHP and HSA Guidance

With regard to high deductible health plans (“HDHPs”) and HSAs, the FAQs state that HDHPs can continue to cover testing and treatment of COVID-19 prior to the deductible. This applies until further guidance is issued. Normally, only preventive care or certain other disregarded coverage can be covered prior to the deductible; covering other items makes employees and dependents ineligible to make or receive contributions to their HSAs. While the ability to continue COVID-19 coverage and treatment before the minimum deductible is welcome, the FAQs state that the Treasury Department and IRS will issue more guidance in the near future. The wording suggests that this position may change in that future guidance.

Communicating Coverage Changes

If a plan is changing how it covers any COVID-related items and that change affects the plan’s summary of benefits and coverage (“SBC”), then the change generally must be communicated at least 60 days before it is effective. As a practical matter, most SBCs do not contain this level of detail, but employers should review theirs to confirm.

The FAQs do say that if participants were previously told that coverage would only be available during the Public Health Emergency, that prior notification would be sufficient and there would be no need to notify participants 60 days before the change. However, a notification that was given for a prior plan year does not qualify. This means that if an employer said in a prior plan year that coverage would end when the Public Health Emergency ended, then that will be insufficient and the employer will need to provide the 60-day advanced notification.

While not addressed in the FAQ, this does not alleviate the need to issue a summary of material modifications (“SMM”) for any changes in plan coverage. However, the deadline for issuing the SMM in this case is 60 days after the change is adopted. The deadline is shorter than the typical SMM deadline because eliminating coverage of COVID-related items could be seen as a material reduction in benefits or services.

COBRA, Special Enrollment, Etc.

In contrast to the Public Health Emergency, the National Emergency extended timeframes for participants to take various actions, such as electing and paying for COBRA, making benefit plan changes due to special enrollment rights, and various steps in the claims procedure process. More detail on these extensions is provided here. The National Emergency extended the timeframes for these actions by up to one year for each action, or 60 days after the end of the National Emergency, if sooner.

It has been widely reported that the National Emergency ended early. However, the declaration that ended on April 10 was one of three separate disaster declarations and was the only one that did not have any benefits impact. As a result, the original May 11 expiration still holds.

One key example demonstrates how this is a little more complicated than it first appears. In Example 2 of the FAQs, an individual has a loss of coverage on May 12, 2023, the day after the National Emergency ends . That individual is provided a COBRA election notice on May 15. However, because the extension/outbreak period goes for another 60 days after the end of the National Emergency, the example concludes that the person has until 60 days after July 10 (or until September 8) to elect COBRA. Employers may want to review the examples closely to ensure they understand how this works.

The FAQs also confirm that individuals who lose eligibility for Medicaid or CHIP have 60 days to enroll in group health plans. This loss of eligibility could occur as a result of Medicaid redeterminations that were suspended during the pandemic, as HUB discussed here.

However, the FAQs do contain a couple of overbroad statements indicating that “Nothing in the Code or ERISA” prevents plans from providing longer timeframes than ERISA or other applicable laws require. While this is true at one level, plans are still required to follow their plan documents, as HUB has noted here. Therefore, if an employer wants to provide a longer timeframe for claims to be appealed, it must be reflected in their plan documents. Employers considering allowing a longer timeframe should consult with their insurance carriers or TPAs who are administering their plans to make sure those service providers are on board with offering longer timeframes.

Takeaways

While the FAQs broke little new ground, they did confirm that certain benefit coverage and extension rules would be ending as expected and the additional information around HDHPs and HSAs was also welcome. Employers should continue with their preparations for the end of the Public Health Emergency and National Emergency, including the following:

  • Determine if their health plan will continue to cover COVID-19 testing and out-of-network vaccines at 100% without cost sharing, or implement some form of cost sharing or medical management (such as only covering these items at 100% subject to medical necessity). This should be done in consultation with the employer’s insurance carrier or TPA.
  • Determine if any plan changes in response to the end of the Public Health Emergency will be made immediately (subject to applicable notice requirements), or at the beginning of the next plan year.
  • Review summaries of benefits and coverage to determine if updated summaries need to be sent to covered participants 60 days before these changes.
  • Also review how and when they communicated previously about the Public Health Emergency and National Emergency provisions to determine if additional communications are required. Even if they are not required, it may be advisable to notify participants and COBRA beneficiaries to avoid any confusion.
  • Prepare any required summary of material modifications reflecting the changes to the plan.
  • Consider planning ahead for the end of the National Emergency and Outbreak Period by understanding the applicable deadlines, including the fact that deadlines will vary by participant.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.