A Tale of Two Remedies: Preparing Employee Benefits Plans for the Sunset of Covid-19 ‎Relief

On January 30, 2023, the Biden Administration announced that both the COVID-19 National Emergency and the Public Health Emergency (collectively, the “Emergency Declarations”) would end on May 11, 2023, sunsetting nearly three years of extended deadlines and certain mandates related to COVID-19 testing and vaccines applicable to employer-sponsored benefit plans. On March 29, 2023, the Senate passed a bill to expedite the end of the National Emergency, and, on April 10, 2023, President Biden signed this bill into law, ending the National Emergency weeks in advance of the previously announced sunsetting date. The Public Health Emergency is still expected to end on May 11, 2023.

On March 29, 2023, the Departments of Labor, Health and Human Services and Treasury (collectively, the “Departments”) issued Frequently Asked Questions (“FAQs”) providing guidance to group health plans and plan sponsors on the impact of the end of the Emergency Declarations.

Background on the Emergency Declarations

The U.S. Department of Health and Human Services  initially declared COVID-19 as a ‎Public Health Emergency as of January 27, 2020, which has been routinely extended in 90-day increments.‎  As the COVID-19 virus continued to spread, President Donald Trump declared ‎the COVID-19 National Emergency on March 13, 2020.‎  Meanwhile, Congress enacted legislative relief, including certain provisions in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Consolidated Appropriations Acts (“CAA”), much of which is tied to the end of both the National Emergency and the Public Health Emergency.  As previously mentioned, the National Emergency ended on April 10, 2023, while the Public Health Emergency is expected to end on May 11, 2023.

Sunsetting National Emergency Relief

Since the National Emergency was declared in 2020, certain periods applicable to ERISA plans were disregarded until the earlier of (i) one year from the date on which the participant or plan first has an obligation for which the period is disregarded or (ii) 60 days after the end of the National Emergency (“Outbreak Period”) (see our previous blog post “US Department of Labor Clarifies Extension of Certain Employee Benefit Deadlines Due to COVID-19”).  Effective June 9, 2023, 60 days after the April 10, 2023 end date of the National Emergency, the following periods will no longer be disregarded:

• The 60-day period within which qualified beneficiaries may elect COBRA continuation coverage;
• The period within which plan sponsors must provide COBRA election notices or certain disclosure documents (e.g., summaries of material modifications, SPDs, summary annual reports, or qualified default investment alternatives);
• The period within which COBRA premium payments must be made;
• The period within which the plan must be notified of a COBRA qualifying event or disability;
• The period within which a claim must be filed under a plan’s claims procedures;
• The period within which an appeal of a plan’s adverse benefit determination must be filed;
• The period within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination;
• The period within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete; and
• The 30-day (or 60-day, if applicable) period within which HIPAA special enrollment must be requested.

The FAQs provide helpful examples on how the end of the Outbreak Period will impact this relief.  For example, based on the then-anticipated end of the National Emergency on May 11, 2023, if a participant experienced a COBRA qualifying event and lost coverage on April 1, 2023, the 60-day deadline to make a COBRA election would begin after July 10, 2023, and the participant would have until September 8, 2023 to make the COBRA election.  However, if the participant lost coverage on July 12, 2023, which is after then end of the then-anticipated Outbreak Period, the extensions under the National Emergency would not apply and the participant would have 60 days after July 12, 2023 to make the COBRA election.

Because the National Emergency ended on April 10, 2023, the suspended timeframes will begin to count down 60 days from that date on June 9, 2023 (i.e., at the end of the Outbreak Period).  Despite this, nothing prevents a group health plan from allowing for longer timeframes to complete the applicable actions, so group health plans may, but are not required to, extend the otherwise applicable timeframes to allow for later, converging, deadlines for these actions.  In fact, the Departments, in the FAQs, encourage group health plans to do so.

Sunsetting Public Health Emergency Relief

The Public Health Emergency required group health plans to cover various COVID-related items.  Unlike the National Emergency relief, the Public Health Emergency relief will end on May 11, 2023, with no additional 60 day buffer.

COVID-19 Testing

During the Public Health Emergency, employer group health plans have been required to cover COVID-19 diagnostic testing and related services with no cost sharing (i.e., deductibles, co-pays, or co-insurance), prior authorization, or other medical management requirements, for both in-network and out-of-network coverage.  This coverage extends to over-the-counter (“OTC”) COVID-19 tests.

Upon the end of the Public Health Emergency, group health plans will no longer be required to cover COVID-19 testing without cost sharing, prior authorization or other medical management requirements or provide any benefits for OTC COVID-19 tests.  However, a plan may continue to provide this coverage without cost sharing, and the Departments, in the FAQs, encourage group health plans to do so.

The FAQs clarify that an item or service is furnished on the date the item or service was rendered to the individual (or for an over-the-counter COVID-19 diagnostic test, the date the test was purchased) and not the date the claim is submitted. Plans and issuers should look to the earliest date on which an item or service is furnished within an episode of care to determine the date that a COVID-19 diagnostic test is rendered.  For example, if a health care provider collects a specimen to perform a COVID-19 diagnostic test on the last day of the Public Health Emergency but the laboratory analysis occurs on a later date, the plan or issuer should treat both the specimen collection and laboratory analysis as if they were furnished during the Public Health Emergency and are therefore covered without cost sharing by the plan.

COVID-19 Vaccines

The Public Health Emergency requires group health plans to cover COVID-19 vaccines from in-network or out-of-network providers without cost sharing, prior authorization or other medical management requirements.

After the end of the Public Health Emergency, non-grandfathered group health plans will continue to be required to cover COVID-19 vaccines with no cost sharing from in-network providers or in-network facilities as part of the preventive care services under the Affordable Care Act.  However, plans will no longer be required to cover COVID-19 vaccines obtained from out-of-network providers without cost sharing if the plan has an in–network provider who can provide the vaccine.

First-Dollar Coverage of COVID-19 Testing Still Permitted Under High Deductible Health Plans

Generally, a high deductible health plan (“HDHP”) may not pay for items or services, other than preventive care, until the participant has met the statutory deductible for HDHPs.  During the Public Health Emergency, the Department of Treasury and IRS issued guidance allowing HDHPs to provide first-dollar coverage for COVID-19 testing and treatment without causing the participant to be ineligible to contribute to a health savings account (“HSA”).  The FAQs confirm this relief will continue to apply after the end of the Public Health Emergency until further guidance is issued.

Mental Health Parity

During the Public Health Emergency, when calculating parity under the Mental Health Parity and Addiction Equity Act, plans may disregard benefits for COVID-19 testing items and services that are provided without cost sharing.  After the end of the Public Health Emergency, this relief will no longer be available.

Employee Assistance Plans

During the Public Health Emergency and the National Health Emergency, an Employee Assistance Plan (“EAP”) will not be treated as providing benefits that are “significantly in the nature of medical care” solely because the EAP offers COVID-19 testing and diagnosis.  After the end of the Public Health Emergency, this relief will no longer be available.

Next Steps

Employers and plan sponsors should begin preparing for the anticipated May 11, 2023 deadline marking the end of the Public Health Emergency and the June 9, 2023 deadline marking the end of the Outbreak Period.  Employers and plan sponsors should consider making preparations for end of the Public Health Emergency and the Outbreak Period, including:

• Review group health plan terms for COVID-19-related coverage including testing, ‎vaccines, and treatment;
• Consider whether your plan will continue to cover COVID-19 testing and out-of-‎network vaccines without cost sharing, prior authorization, or other medical ‎management requirements;
• Carefully consider the timing of the changes to your plan and whether making midyear changes will trigger midyear election changes from participants;
• Update plan documentation and participant communications to ensure all ‎materials accurately reflect post–Public Health Emergency coverage, exclusions, ‎and limitations.‎ If the plan document and/or summary plan description was amended to incorporate Emergency Declaration relief, such documents will need to be amended and a summary of material modification will need to be issued. If the changes affect the content of the summary of benefits and coverage (“SBC”), a revised SBC must be provided to participants at least 60 days in advance of the change;
• Consider providing certain notifications regarding changes to coverage of COVID-19 diagnosis and treatment, including testing, regardless of whether such notifications are required;
• Consider the impact of these changes on the plan’s compliance with the Mental Health Parity and Addiction Equity Act;
• Consider the impact of the changes on EAPs, HDHPs, and grandfathered plans. (Note that grandfathered plans can revoke any benefits added during and authorized by the Public Health Emergency without losing their grandfathered status); and
• Coordinate with COBRA administrators and flexible spending account vendors to ensure that the deadline extensions were properly applied and that affected participants receive appropriate notification of the end of the Outbreak Period.

The post A Tale of Two Remedies: Preparing Employee Benefits Plans for the Sunset of Covid-19 ‎Relief appeared first on Employee Benefits.