Labor & Employment News Alert
COVID-19: Changes to Group Health Plans Required
April 23, 2020
By: Jill E. Hall
In the past month, the COVID-19 pandemic has prompted unprecedented change for employers, including employer-sponsored group health plans. The Departments of Labor, Health and Human Services and Treasury recently issued FAQs to implement the new health coverage provisions for group health plans and issuers. This article summarizes the major requirements imposed on employer-sponsored group health plans as set forth in COVID-19-related legislation. These requirements apply to most group health plans - insured and self-funded, grandfathered and non-grandfathered, private employer-sponsored plans, church plans and non-federal (state and local) government plans. They do not apply to certain excepted benefit plans and retiree-only plans.
The Families First Coronavirus Response Act (FFCRA) requires coverage of services related to COVID-19 diagnostic testing by employer-sponsored plans when those services are furnished on or after March 18, 2020 and during the applicable emergency period. This coverage must be provided without imposing prior authorization or cost-sharing requirements, including deductibles, co-payments and coinsurance. The Coronavirus Aid, Relief and Economic Security (CARES) Act amends the FFCRA by including additional diagnostic items and services that must be covered by group health plans without cost-sharing or prior authorization requirements and mandates coverage of preventive care such as vaccines.
Group health plans must cover testing for COVID-19. This includes in vitro diagnostic tests approved by the Food and Drug Administration (FDA) as well as other COVID-19 tests awaiting FDA emergency use authorization and tests to detect antibodies against the virus. FFCRA further bans cost-sharing for items and services provided during a visit that results in a COVID-19 test. The item or service must relate to the “furnishing or administration” of the test or the ”evaluation” of an individual’s need for the test. The FAQs indicate that one’s provider, and not the plan, determines whether testing - or related items or services - is medically appropriate. Further, if a provider orders other tests (such as an influenza test or blood test) to determine the necessity of COVID-19 testing, the plan must cover these additional tests free of cost-sharing if a COVID-19 test is ultimately ordered. Items and services related to testing must be covered regardless of the setting and may take place in a doctor’s office, emergency room, urgent care center or a telehealth session. Items and services provided in nontraditional settings also must be covered with no cost-sharing. This would include drive-through screening sites where licensed healthcare providers administer diagnostic testing. Finally, the no-cost coverage mandate applies even to items and services related to COVID-19 testing provided by out-of-network providers.
Sponsors of group health plans must provide notice of these changes to participants. Ordinarily, mid-year changes to benefits that would alter the content of an annual Summary of Benefits and Coverage must be made with 60 days’ advance notice of the change to plan participants. The FAQs waive this notice requirement for the coverage related to COVID-19 testing and related items and services. Instead, group health plans must provide notice of these changes “as soon as reasonably practicable.”