The Departments of Treasury, Labor, and Health and Human Services have now issued interim final regulations requiring group health plans to cover COVID-19 testing and vaccines.
The agencies updated Affordable Care Act preventive services regulations to require these non-grandfathered plans to cover, without cost-sharing, qualifying coronavirus preventive services, including immunizations that receive recommendations from the CDC or receive an A or B rating from the US Preventive Services Task Force. The coverage must be provided within 15 days after the recommendation or rating, regardless of whether the service or immunization is recommended for routine use and whether it is provided by an in-network or out-of-network provider. Normally, plans only have to cover preventive services provided by in-network providers and can wait until the first plan year that is at least 12 months after the recommendation or rating to cover them. However, in light of the pandemic, the CARES Act requires coronavirus preventive services to be covered more quickly.
Plans must also cover the cost of a vaccine's administration, even if the cost of the vaccine itself is paid by a third party such as the federal government. Plans may impose cost-sharing for office visits that are billed separately, but office visits not billed separately must be covered without cost-sharing if the primary purpose of the visit is for the administration of the vaccine. If the vaccine and/or office visit is provided by an out-of-network provider, the plan must reimburse the provider at a reasonable rate based on prevailing market rates (unless it can negotiate a lower rate).
As reported here in March 2020, after the start of the pandemic, if someone visits a doctor or hospital, in-network or out-of-network, to be tested for COVID-19, the test and the related visit costs must be covered in full by the group health plan. These rules apply to all employer-based plans, whether they are private, governmental, or church plans. It also applies whether the plans are insured or self-funded.
The agencies updated The CARES Act regulations this month to clarify that the rules apply to both grandfathered or non-grandfathered plans. To be in compliance the plan must cover a broad range of COVID-19 related diagnostic items and services, including the traditional COVID-19/PCR test, antigen tests, and antibody tests, as discussed more fully in our March article linked above. For out-of-network providers, plans are to reimburse at the cash price listed by the provider on a public website or a lower negotiated rate. The updated regulations give providers further posting instructions and details about how the posting requirement will be enforced (including with a $300/day penalty for failure to post). Hopefully, the clarity around the posting requirement will lead providers who have not yet posted their COVID-19 testing prices to do so.
The agencies have requested comments on all of these issues and certain aspects of the regulations by January 4, 2021. The agencies seek comments on related issues, including whether the transparency posting requirement should be expanded to include providers that perform additional services related to the performance of a COVID-19 test (such as specimen collection or transportation). The agencies also note that COVID-19 testing efforts have been hampered by challenges such as delays in obtaining results, test accuracy, and supply shortages. Plans are encouraged to explore using pay-for-performance arrangements that create incentives for providers to reduce the time it takes to report test results while still maintaining accuracy.
Employers with insured coverage should work with the HUB advisor to confirm how these changes will be implemented in their plan and how they will be communicated. Employers with self-funded plans should check with the third-party administrators (TPAs) and stop-loss carriers. TPAs will need to make sure their systems are set up to process claims in this manner. Since this is a mandate, stop-loss carriers should cover these claims, but employers will want to work with their stop-loss carrier to confirm. Individual claims for testing are unlikely to trigger an individual stop-loss deductible/attachment point, but a large volume of tests, combined with other claims, may exceed an aggregate deductible/attachment point.
Employers also need to notify employees. The normal deadline for notifying employees of a change like this under an ERISA plan is not until 210 days after the end of the plan year in which the change becomes effective. However, given that some employees may have an imminent need for this information, it is better to communicate this sooner rather than later. Note that the regular ERISA distribution rules still apply. Of course, this is a rapidly-evolving situation. Please keep vising HUB’s Coronavirus Resource Center for the latest updates on this and other developments under this law.
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.