Emergency: Impacts on Health Plans
The Biden Administration has announced intentions to end both the National Emergency and Public Health Emergency periods on May 11, 2023. Summarized below are the impacts on group health plans and what employers should prepare for as both emergency periods come to a close. COVID-19 Public Health Emergency Since early 2020, the Secretary of HHS has renewed the Public Health Emergency (PHE) every 90 days and will renew it one last time through May 11, 2023.When the PHE ends on May 11, 2023, health plans will no longer be required to cover COVID-19 diagnostic tests (including OTC tests) and related services without cost sharing. However, health plans will still be required to cover recommended preventive services, including COVID-19 immunizations, without cost sharing, but this coverage requirement will be limited to in-network providers. Therefore, if the plan is fully insured, the carrier may elect to stop covering COVID-19 tests and other services without cost-sharing. Self-funded plans will have to decide (in connection with stop-loss) what changes to make to the plan terms. In other words, plan sponsors should review coverage of COVID-19 and related costs to determine how the plan will cover such costs going forward. Plan sponsors should also consider whether any continued coverage may cause parity problems under the Mental Health Parity and Addiction Equity Act (MHPAEA). If a change to coverage (e.g., no longer without cost-sharing) is made, employers should ensure that all plan-related documents and participant communications accurately describe coverage, exclusions, and limitations following the end of the PHE. In addition, certain mid-year changes may be considered a reduction in benefits that would require a summary of material modification (SMM) within 60 days of the change.
COVID-19 Outbreak Period
The COVID-19 Outbreak Period was declared effective on March 1, 2020. This rule significantly impacted employee benefit plans by extending timelines related to COBRA, CHIP, HIPAA Special Enrollments, and claims and appeals procedures. Specifically, the Outbreak Period impacted benefit plans in several ways by instructing ERISA plans and participants to disregard the Outbreak Period for:
- 30-day timeframe for a participant to elect HIPAA special enrollment;
- 60-day timeframe for a participant to elect CHIPRA special enrollment;
- 60-day timeframe for a participant to elect COBRA continuation coverage;
- Timeframe for a participant or Qualified Beneficiary to notify a plan of a qualifying event or disability determination;
- Timeframe for the plan to provide a COBRA election notice;
- Timeframe for a participant to timely pay COBRA premiums; and
- Timeframe for a participant to file claims, appeals, and requests for external review.
However, it is important to note that ERISA contains language limiting timeline extensions to no more than one year. Thus, for example, the normal 60-day timeframe for a qualified beneficiary to elect COBRA coverage was extended by the Outbreak Period to one year plus 60 days.
With the end of the National Emergency on May 11, 2023, the 60-day clock to sunset the Outbreak Period will start. This means that all of the items above will revert back to their normal timeframes effective July 10, 2023 (60 days after the end of the National Emergency Period).As a result of the end of these periods, employer plan sponsors should begin planning now for the end of the COVID-19 Outbreak Period and PHE and make any changes to plan terms or adjustments as necessary, especially as it relates to COBRA administration and end to extended timeframes.