What employers with group health plans have to do before the COVID-19 emergency ends

If you are an employer sponsoring a group health plan for your employees, chances are you’re aware of the special rules intended to enhance coverage and provide administrative relief during the COVID-19 pandemic. The rules are generally tied to the declaration of COVID-19 as a Public Health Emergency (first declared by the Department of Health and Human Services as of January 27, 2020, and extended every 90 days thereafter) and the National Emergency (first declared by the Trump administration on March 13, 2020, and renewed annually thereafter).

On January 30, 2023, the Biden White House announced its intent to end both the Public Health Emergency and National Emergency on May 11, 2023. Employers sponsoring group health plans will be affected in several ways when the special rules end and should take action with respect to their plans in advance of May 11.

As background, the Families First Coronavirus Response Act of 2020 required group health plans to expand coverage for all COVID-19-related testing ordered by a participant’s physician. Specifically, group health plans had to fully cover COVID-19-related testing at both the in-network and out-of-network level and couldn’t apply prior authorization or other medical management techniques to testing.

The Coronavirus Aid, Relief, and Economic Security Act of 2020 expanded coverage for COVID-19-related testing even further and required coverage (both in-network and out-of-network) of COVID-19 vaccines as a fully covered preventive service. In January 2022, the Departments of Labor, Treasury, and Health and Human Services issued guidance requiring group health plans to cover at-home COVID-19 tests purchased by participants. All of these coverage rules for COVID-19 testing and vaccines will end on May 11, except for vaccines that are considered preventive services that non-grandfathered plans must cover without cost-sharing in network.

In addition to required testing and vaccine coverage, effective March 1, 2020, HIPAA special enrollment, COBRA, and claims and appeals deadlines applicable to ERISA-covered plans are tolled until the earlier of (i) one year from the date of the applicable deadline (determined on an individual basis) or (ii) 60 days after the announced end of the National Emergency.

The period during which the deadline is delayed is referred to as the “Outbreak Period.” During the Outbreak Period, the following deadlines are delayed: (i) the special enrollment period under HIPAA (30 or 60 days, as applicable); (ii) the 60-day COBRA election period; (iii) the COBRA premium payment due date; (iv) the deadline for qualified beneficiaries under COBRA to notify their plan administrator of a qualifying event; (v) the deadline for a plan to provide COBRA election notices; (vi) claims and appeals filing deadlines; and (vii) deadlines related to external review of claims. These administrative rules will end on July 10, 60 days after the end of the National Emergency.

In connection with the end of the Public Health and National emergencies, plan sponsors will need to consider plan design options, work with third-party administrators to ensure compliance, and communicate changes to plan participants.

Once the Public Health Emergency ends, employers can cover COVID-19 tests in the same manner as any other diagnostic test. Sponsors should consider how coverage will be applied when a test is administered during an office visit or when a physician sends the test to a lab. Sponsors should also consider how to treat at-home testing under their plan. Although over-the-counter diagnostic tests are reimbursable under health savings accounts (HSAs), health reimbursement arrangements (HRAs), and flexible spending accounts (FSAs), most major medical group health plans do not cover over-the-counter products.

Further, plan sponsors should consider whether to cover COVID-19 vaccines only when obtained from an in-network provider or facility (which is required under the Affordable Care Act regardless of the Public Health Emergency) or whether to continue to cover them at both the in-network and out-of-network level.

Once plan sponsors confirm their plan design, they should contact their third-party plan administrators to ensure that procedures are in place to modify coverage requirements come May 11. With respect to COVID-19 testing and vaccines, sponsors should ensure that coverage can be timely modified and whether the sponsor or administrator will communicate the changes to plan participants. Similarly, with respect to the Outbreak Period administrative rules, sponsors should confirm that administrators can reinstate the applicable deadlines by July 10 and communicate as needed to relevant participants.

Given that most of the coverage and administrative rules have been in place for almost three years, participant communication is key to mitigating potential disputes. To the extent that summary plan descriptions have been modified to reflect any of the COVID-19-related rules, a summary of material modifications should be sent to participants within 60 days of the change. Even if the summary plan description does not describe the COVID-19 rules, it is still recommended, from an ERISA fiduciary perspective, that plans notify plan participants of the changes.

Special consideration should be given to the employee population that receives the communications. Certainly, active plan participants (including COBRA enrollees) should be informed. Also, former employees who might be eligible for COBRA during the Outbreak Period (generally, anyone who lost coverage with a COBRA election right within the prior 12 months) should receive notice that the Outbreak Period is ending. Also, because HIPAA special enrollment deadlines are delayed during the Outbreak Period, employees who have not enrolled in the plan should receive the notice in case they had a special enrollment right within the past 12 months.

With these nuances, the best approach may be to send the notice to all active employees and any former employee with COBRA election rights within the 12-month period ending on July 10, 2023. Plan sponsors and administrators should also review existing COBRA notices in advance of July 10. Many administrators modified standard COBRA election forms to reflect the special extended timelines for COBRA notifications, elections, and premium payments. Now, plan sponsors and administrators should work with their third-party COBRA administrators to modify the election forms and remove references to the extended timeframes.

For most plan sponsors, the end of the Public Health and National Emergencies is a welcome development from a health plan management perspective. First-dollar coverage of COVID-19 tests, particularly at-home tests, has been a significant cost driver under most plans. Additionally, the Outbreak Period administrative deadline delays have been difficult to navigate (especially with respect to COBRA premium payments). As plan sponsors prepare to return to the old normal, benefits counsel should be consulted on questions related to design requirements, effective dates, and participant communications.

Lena Gionnette is counsel in Nixon Peabody’s Corporate practice, and she is a member of the firm’s Employee Benefits & Executive Compensation team. Nixon Peabody partners Damian Myers and Yelena Gray and associate Annie Zhang, all of the Corporate practice and Employee Benefits & Executive Compensation team, contributed to this article.