On Jan. 30, 2023, the Biden Administration announced its intention to end the National Emergency and Public Health Emergency (PHE) due to COVID-19 as of May 11, 2023. These dual emergency declarations have been in place since early 2020 and provide the federal government the flexibility to waive, add, and otherwise alter certain regulatory provisions that apply to private health insurance. The expiration of these emergency periods will impact employer-sponsored group plans in various ways. Group plan sponsors are encouraged to coordinate with their brokers, insurers, and third-party administrators to plan for each of the impending changes discussed below.
Public Health Emergency: Coverage Mandates and Regulatory Relief
The U.S. Department of Health and Human Services (HHS) first declared that a PHE existed due to the COVID-19 pandemic on Jan. 31, 2020. Since that date, HHS has repeatedly extended the COVID-19 PHE in 90-day increments. HHS issued the final 90-day renewal of the PHE on Feb. 9, 2023, 90 days in advance of its scheduled expiration of May 11, 2023.
While not an exhaustive list, the following are the most significant health plan coverage mandates and regulatory relief that will cease upon the end of the COVID-19 PHE:
- COVID-19 Diagnostic Testing Without Cost Sharing—During the PHE, health plans and insurance carriers are required to cover all diagnostic COVID-19 tests (including self-administered, at-home tests) and related services without imposing any cost sharing, prior authorization, or other medical management requirements. Health plans and issuers will no longer be required to provide this first-dollar coverage of diagnostic testing absent medical management techniques. Coverage of COVID-19 testing for employment screening or public health surveillance purposes has not been required during the PHE and will not be impacted by the end of the PHE.
- COVID-19 Vaccines from Out-of-Network Providers—With the PHE still in effect, non-grandfathered group health plans and health insurance issuers must cover coronavirus preventive services, including recommended COVID-19 immunizations, without cost sharing requirements. During the PHE, covered services may be obtained from in-network or out-of-network providers. Upon expiration of the PHE, pursuant to the Affordable Care Act (ACA), health plans and issuers must continue to cover preventive COVID-19 immunizations without cost sharing but can limit the full coverage to immunizations received from in-network providers.
- Standalone Telehealth Benefits—For plan years beginning during the PHE, a large employer (with more than 50 employees) is permitted to offer standalone telehealth benefits and other remote care services to individuals who are not eligible for that employer’s medical plan. Under the federal agencies’ non-enforcement policy announced in June 2020, such standalone telehealth coverage can be offered by the employer to all employees without violating the ACA’s market reforms. However, upon the start of the first plan year following the end of the PHE, these types of standalone telehealth arrangements, when offered independent of the employer’s major medical coverage, could be cited as a range of ACA violations resulting in potential penalties of up to $100 per day.
National Emergency: Suspended Deadlines During the Outbreak Period
In May 2020, the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) issued joint regulations that effectively extended various deadlines related to employer-sponsored group health plans. The period during which the deadlines were suspended was referred to as the COVID-19 “outbreak period”. According to the agencies’ guidance, the outbreak period began in March 2020 when former President Trump declared a national emergency due to the COVID-19 pandemic, and it will continue until 60 days after the end of the COVID-19 national emergency. Under this timeline, per the Biden Administration’s plan to end the COVID-19 national emergency on May 11, 2023, the outbreak period will end on July 10, 2023.
During the outbreak period, the following key deadlines that apply under ERISA benefit plans are suspended up to the earlier of (a) one year from the date an individual was first eligible for the relief; or (b) the expiration of the outbreak period (July 10, 2023):
- HIPAA Special Enrollment—the 30-day period (or 60-day period, if applicable) to request special enrollment;
- COBRA Premium Payments—the deadline by which COBRA premiums must be remitted (generally at least 45 days after the day of the initial COBRA election, with a grace period of at least 30 days for subsequent premium payments);
- COBRA Elections—the 60-day period to make an initial election for COBRA continuation coverage;
- COBRA Notices—the 60-day period to notify the plan of a COBRA qualifying event or disability determination;
- Claims Procedures—The deadline by which a plan participant must file a claim according to the plan’s claims procedures, including requesting reimbursements under health flexible spending account (FSAs) and health reimbursement arrangements (HRAs);
- Appeals Procedures—the deadlines to file an appeal of an adverse benefit determination, request an external review of an adverse benefit determination, or to perfect an incomplete request of an external review according to the plan’s claims and appeals procedures.
Upon the expiration of the outbreak period in July, each of the deadlines listed above will revert back to their traditional timelines according to the applicable federal regulations or the ERISA plan’s pre-emergency terms.
Preparing for the Emergencies’ End: Action Steps
The impending conclusion of both COVID-19 emergency declarations triggers a number of considerations and actions to be managed by group health plan sponsors. While the appropriate steps may vary depending upon each plan’s funding mechanism, third-party vendors, and whether coverage changes will be adopted, plan sponsors (with the help of their brokers) are encouraged to take at least some of the following steps in anticipation of the end of the declarations:
First, be vigilant for any new relevant agency guidance and legislative developments. As an example, a bi-partisan bill, the Telehealth Benefit Expansion for Workers Act of 2023, was recently proposed in the federal House of Representatives. This law would permit employers to treat standalone benefits for telehealth services as excepted benefits, granting those plans an exemption from the ACA’s market reform provisions.
Next, coordinate with insurers, third-party administrators, and pharmacy benefit managers (as applicable) to evaluate and define which of the currently mandated COVID-related benefits should continue or cease, and when. Some insurers and administrators may prefer to delay coverage changes to the plan’s next renewal, while others may take a more aggressive approach or allow plan sponsors the discretion to decide. In addition, if a middle-market or large plan sponsor took advantage of the agencies’ ACA non-enforcement policy on telehealth coverage to expand eligibility for its telehealth benefits during the pandemic, that expanded eligibility should be re-evaluated by the start of the employer’s next plan year.
Plan sponsors should also confirm that carriers, third-party administrators, and COBRA vendors have defined their processes to transition back to the traditional, pre-pandemic COBRA, HIPAA special enrollment, and ERISA claims and appeals timeframes at the end of the outbreak period. Similarly, the plan sponsor’s own benefits and human resources staff should familiarize themselves with the “old but new again” deadlines that will apply at the expiration of the outbreak period and document the administrative changes in writing.
Documentation of plan changes and communication with participants will be vital. To those ends, to the extent any coverage or administrative provisions will be modified or eliminated under a medical/prescription drug plan or health insurance contract in connection with the end of the emergency periods, plan sponsors should draft and implement any necessary amendments to the plan’s ERISA plan document that adequately reflect those changes. Self-insured plan sponsors should make certain that stop-loss carriers are informed and approve of such plan modifications.
Any significant change to a plan’s coverage or administrative terms will also necessitate an update to the plan’s summary plan description (SPD) or issuance of a summary material modification (SMM) or summary material reduction (SMR) to plan participants. Plan sponsors may be able to rely on their insurers and third-party administrators to supply modified benefit summaries or other participant communications for this purpose. Additionally, should any change to benefits adopted outside of a plan’s renewal period affect the content of the plan’s Summary of Benefits and Coverage (SBC), an updated SBC must be furnished to plan participants at least 60 days in advance of the effective date of the change.
Finally, plans should communicate the upcoming changes to the COBRA, HIPAA special enrollment, and ERISA claims and appeals deadlines with plan participants, as this agency guidance from 2021 expressly recommends that plan administrators and fiduciaries “consider affirmatively sending a notice regarding the end of the relief period” in cases where the end of the outbreak period will expose “a participant or beneficiary to a risk of losing protections, benefits, or rights under the plan.” It’s likely that insurers, third-party administrators, and COBRA vendors will handle or assist with these communication efforts, but plan sponsors and brokers are encouraged to coordinate with all parties to ensure that no notice responsibility of the plan is left unaddressed.