By: HUB’s EB Compliance Team

On June 23, the Departments of Treasury, Labor, and Health and Human Services (the “Departments”) released this additional set of FAQs under the Families First Coronavirus Response Act and the CARES Act (the “Acts”).  These FAQs expand on the earlier FAQs released back in April that we discussed here.

Testing Issues

Under the Acts, health plans (including self-funded plans) are required to cover certain diagnostic tests for the coronavirus that meet certain FDA criteria. The new FAQs describe how plans can determine if a test meets the FDA-related criteria. Specifically, the test must fit into one of the following categories:

  • It must be approved, cleared or authorized by the FDA under specific laws. The FAQs state that a list of approved tests is available on its website (at this link).
  • The developer must have requested, or be intending to request within a reasonable time, an FDA emergency use authorization for the test (and the request has not been denied). Developers that have provided a notification to the FDA will be listed on this portion of the FDA website.
  • It must be developed in, and authorized by, a State that has notified the Department of Health and Human Services (“HHS”) of the State’s intention to review COVID-19 diagnostic tests. States that have notified the FDA of this are also available here.
  • It must be approved by other means approved by HHS in guidance it releases. No tests fall under this prong at this time.

These FAQs also confirm that plans are required to cover at-home tests and multiple diagnostic tests, if ordered by the individual’s health care provider. However, health plans are not required to cover testing associated with employees returning to their worksite (for example, screening employees before they come into the office or other facility).

Under the Acts, providers are supposed to post the cost of a COVID-19 diagnostic test on their website. Q&A-11 asks what plans should do if the provider has not posted a price. The Acts are silent on this question, but HHS has the authority to penalize providers for up to $300/day for failing to post a price.

Other Costs

Under the Acts and prior guidance, plans are required to cover a variety of items or service (including other tests, such as flu tests that a provider may administer) without cost sharing if the visit with the provider ultimately results in a test for COVID-19. Q&A-7 of these new FAQs expand on the list by including facility fees in the list of potential covered expenses. A facility fee is a fee for the use of facilities or equipment the healthcare provider does not own or that are owned by a hospital. If that fee is passed on to the plan, the plan would pay for it if the visit results in a COVID-19 test.

Expanding Telemedicine (but Only for Large Employers)

Under Q&A 14 of the new FAQs, a large employer can extend telemedicine or other remote care to employees that are not eligible for its plan. The relevant government agencies will not treat this as a separate plan or require it to comply with most federal mandates under the Affordable Care Act. However, the telemedicine or remote care extension must:

  • Not apply pre-existing condition exclusions;
  • Not discriminate based on health status;
  • Not rescind (that is, retroactively cancel) coverage; and
  • Provide parity in mental health and substance use disorder benefits.

Practically, this means that telehealth and other remote care could be made available to all employees and for all conditions that are available for treatment under the plan, not just COVID-19 related items. However, the guidance does not address whether this extended offering would be treated as a separate plan for purposes of ERISA or the tax code or how the employer should report this expanded eligibility (if at all) on its Form 5500, if it is required to file one. Additional guidance on these questions would be helpful.

This only applies to large employers. Large employers are those that employed an average of 51 employees on business days in the preceding calendar year and who employ at least two employees on the first day of the applicable plan year.

Advance Notice and Grandfathered Relief

In prior guidance, the Departments had relaxed the 60-day advance notice requirement for updated Summaries of Benefits and Coverage (SBCs), as we discussed here. However, this only applied to the expanded coverage that was required or permitted by the Acts and did not address what would happen when the expanded coverage was removed. Q&A 13 of the new FAQs address that issue. 

Under Q&A 13, plans generally do not have to provide 60-day advance notice if they limit, or change the cost sharing, of COVID-19 testing and treatment, or the availability of telemedicine, after the end of the COVID-19 public health emergency. However, to use this relief, the plan must either:

  1. Have already told employees that these expanded benefits will only be available during the public health emergency; or
  2. Give employees reasonable advance notice of these changes (even if less than 60 days).

As a practical matter, employers that decide to modify these enhanced benefits should consider providing notice shortly after the decision is made. Employers should also review their SBC to see if changes are necessary. Even if they are not, employers will want to communicate any changes to their covered employees and dependents as soon as they reasonably can.

Separate from the communication question, Q&A 15 of these June 23 FAQs confirms that a grandfathered plan can reverse how it pays for COVID-19 testing and treatment, or telemedicine and other remote care, at the end of the national emergency. If it does so, it will not lose its grandfathered status, even if these changes result in the elimination of all or substantially all benefits to diagnose or treat a particular disease or would increase cost-sharing requirements.

Mental Health Parity Implications

Q&A 16 of the new FAQs states that the relevant federal government agencies will not take into account COVID-19 testing provided without cost-sharing for purposes of the relevant mental health parity analysis. 

Recall that, under the mental health parity rules, plans cannot impose cost sharing requirements on mental health and substance use disorder benefits that are more restrictive than those they apply to medical surgical benefits. In determining which cost-sharing requirement applies, the mental health parity rules divide plan benefits into six different classifications based on the setting (e.g., inpatient, outpatient, emergency, and prescription drugs) and, for inpatient or outpatient benefits, whether the coverage is provided in-network or out-of-network. Plans can only apply to mental health and substance use disorder benefits the predominant cost sharing requirement that is applied to substantially all medical surgical benefits offered within each of those six classifications. Whether a cost-sharing requirement is “predominant” or applied to “substantially all” benefits is generally based on the amount spent by the health plan. These terms are discussed more in the FAQs and other relevant guidance.

Because COVID-19 testing could cause the “predominant” cost-sharing requirement for certain medical benefits to be $0, that could substantially change the cost sharing that can be applied to mental health and substance use disorder benefits. These FAQs confirm that plans should not have to make changes to their mental health and substance use disorder cost-sharing requirements based on providing COVID-19 testing with no cost sharing.

However, these FAQs do not apply to COVID-19 treatment or other services (such as telehealth or other remote care). Therefore, to the extent a plan provides treatment or other services without cost sharing due to the pandemic, it appears the plan will need to take those into account in doing any mental health party analysis.

Wellness Incentives

Finally, Q&A 17 of the FAQs confirm that a plan may waive its standards under a wellness program as a result of circumstances related to COVID-19. In other words, the plan can treat individuals as having met the wellness standard, whether they actually do or not.

The FAQs caution that the waiver must be available to all similarly situated individuals as described in the wellness regulations. Generally speaking, this means that employees in the same employment-based classification (e.g., full-time v. part-time, union v. non-union, etc.) have to be treated similarly; singling out individual employees is not permitted, especially if it is based on a health factor. Employees and beneficiaries (such as spouses or dependents) can be treated differently. Finally, individuals cannot be grouped based on whether or not they have a specific health factor.

Conclusion

The FAQs are wide-ranging and include other items not mentioned here. However, employers should be aware of these issues and how they could impact their health benefits. Employers should consider working with their insurance carrier (if insured) or third-party administrator (if self-funded) on any of the above items.

For the latest information on the COVID-19 crisis and its effect on employers, please keep visiting HUB’s Coronavirus Resource Center. If you have any questions, please contact your HUB Advisor. You can also view more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.