What Health Plan Sponsors Need to Know About the End of the COVID-19 Emergency Declarations
On January 30, 2023, the Biden Administration announced its intent to end the national emergency and public health emergency declarations related to the COVID-19 pandemic on May 11, 2023. This client alert summarizes the implications on employer-sponsored group health plans created by the end of these declarations.
End of the Presidentially Declared National Emergency
As explained in our previous client alerts here and here, the Department of Labor (“DOL”) and IRS provided guidance requiring group health plans subject to ERISA to disregard the “outbreak period” when determining certain deadlines for COBRA elections, COBRA premium payments, and certain COBRA notices; HIPAA special enrollment requests; and the filing of claims and appeals. The “outbreak period” is the period from March 1, 2020 until the date that is 60 days after the President’s national emergency declaration for COVID-19 expires.
Under ERISA and the Internal Revenue Code (the “Code”), the DOL only has authority to issue deadline extensions of up to one year. In other words, since the “outbreak period” lasted for more than one year (i.e., it is scheduled to last for just over three years), the DOL did not have the authority to extend these deadlines for the entire “outbreak period.” As a result, in Notice 2021-01, the DOL clarified that the one-year extension applies to deadlines on an individual basis. Based on Notice 2021-01, an individual’s deadline will be “paused” until the earlier of one year from the date that the individual was first eligible for the “outbreak period” relief, or the end of the “outbreak period.” See our previous client alert here.
Since the President’s national emergency declaration for COVID-19 is expected to end on May 11, 2023, the COVID-19 outbreak period is also expected to end 60 days later on July 10, 2023. If this occurs, then on July 10, 2023, any deadlines that are “paused” will start to run again.
Example. Assume that a qualified beneficiary experienced a COBRA qualifying event on March 1, 2023. Ordinarily, this qualified beneficiary would have a 60-day election period, or until April 30, 2023, to elect COBRA continuation coverage. However, the group health plan must disregard the “outbreak period” under these circumstances until July 10, 2023. As a result, the qualified beneficiary’s 60-day election period will not start to run until July 10, 2023, and the qualified beneficiary will have 60 days from July 10, 2023, or until September 8, 2023, to elect COBRA continuation coverage.
End of Public Health Emergency Declaration by the Department of Health and Human Services
The end of the public health emergency (“PHE”) declaration by the Department of Health and Human Services (“HHS”) on May 11, 2023 will impact group health plans as follows:
After May 11, 2023, group health plans, including grandfathered group health plans, will no longer be required to cover certain items and services related to testing for COVID-19 without participant cost-sharing (i.e., deductibles, copayments, or coinsurance), prior authorization, or other medical management requirements. The requirement for group health plans to cover at least eight at-home tests per-participant-per-month will also end after May 11, 2023. We discussed these COVID-19 testing coverage requirements in our previous client alerts here and here. As a result, plan sponsors will have the flexibility to determine how their plan will cover COVID-19 testing going forward.
Pre-Deductible COVID-19 Testing and Treatment
If a plan sponsor voluntarily chooses to cover COVID-19 testing and treatment under a high deductible health plan (“HDHP”) without participant cost-sharing after May 11, 2023, this could jeopardize the HSA-eligibility of individuals enrolled in the HDHP. During the pandemic, the IRS addressed this issue in Notice 2020-15. Under Notice 2020-15, HDHPs may cover testing and treatment of COVID-19 with no participant cost-sharing before the minimum deductibles are met without jeopardizing the HSA-eligibility of individuals covered by the HDHP. See our previous client alert here. However, Notice 2020-15 states that the relief will only last “until further guidance is issued.” We suspect that the IRS will issue further guidance soon given the upcoming end of the COVID-19 emergency declarations. However, until we receive that additional guidance, it is uncertain if the relief under Notice 2020-15 will end after May 11, 2023.
HDHPs and Telemedicine
The end of the PHE does not impact the two-year extension (generally, until December 31, 2024) under the Consolidated Appropriations Act, 2023 (“CAA 2023”) of the relief for HDHPs and telemedicine. See our previous client alerts regarding this relief here, here, and here. As many plan sponsors are aware, offering a telemedicine benefit in conjunction with an HDHP can potentially jeopardize the HSA-eligibility of participants in the HDHP. Specifically, the extended telemedicine relief under the CAA 2023 applies for plan years beginning on or after January 1, 2023, and before January 1, 2025. The ending of the PHE does not change this relief period.
COVID-19 Reimbursements for Out-of-Network Providers
After May 11, 2023, group health plans, including grandfathered group health plans, will no longer be required to reimburse out-of-network providers for COVID-19 tests and related services. Currently, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) requires group health plans to reimburse providers for COVID-19 testing at the negotiated rate with the provider and, if no negotiated rate, at the cash price for the COVID-19 test published by the provider on a public website. See our previous client alert here.
Under the Families First Coronavirus Relief Act (“FFCRA”), group health plans, including grandfathered group health plans, are required to cover COVID-19 testing expenses without any participant cost-sharing during the PHE. The CARES Act expanded this relief for non-grandfathered group health plans to include coverage of preventive services and vaccines for COVID-19, including services provided by out-of-network providers, without any participant cost-sharing. See our previous client alert here.
In general, after May 11, 2023, group health plans will no longer be required to cover testing, preventive services, and vaccines for COVID-19 without cost-sharing. However, the requirement under the CARES Act that non-grandfathered group health plans must cover in-network preventive services and vaccines for COVID-19 is not tied to the ending of the PHE. In other words, non-grandfathered group health plans will continue to be required to cover in-network preventive services and vaccines for COVID-19 without any participant cost-sharing after May 11, 2023, even if the PHE ends on May 11, 2023.
In addition, non-grandfathered group health plans will continue to be required to cover new preventive services and vaccines for COVID-19 that are provided in-network without any participant cost-sharing within 15 business days of the preventive service or vaccine receiving the required “A” or “B” rating from the United States Preventive Services Task Force (“USPSTF”) or recommendation from the Advisory Committee on Immunization Practices (“ACIP”). The most recent COVID-19 vaccine to receive an ACIP recommendation subject to this accelerated 15-business-day rule was the Novavax vaccine in August 2022. (Other new preventive services and vaccines that are not related to COVID-19 are required to be covered without participant cost-sharing for plan years beginning one year after the USPSTF guideline or ACIP recommendation is issued.)
Plan sponsors will need to work closely with their third-party administrators (for self-funded plans) and insurers (for fully insured plans) to ensure that they are prepared for the upcoming end of the COVID-19 emergency declarations. Specifically, to the extent that plan documents and participant notices were amended to reflect the temporary extended deadlines under the presidentially declared national emergency, plan sponsors should revise such documents accordingly. In addition, plan sponsors may also want to revisit their plan designs regarding the coverage of COVID-19 testing.
If you have any questions about the end of the COVID-19 emergency declarations, please contact a member of the Miller Johnson Employee Benefits and Executive Compensation practice group.