Group Health Plan Changes in Wake of Coronavirus

March 20, 2020

By Alexandra A. Ifrahand Joshua M. Osborne

 On Wednesday, March 18, 2020 President Donald Trump signed into law House Bill 6201, the Families First Coronavirus Response Act, (FFCRA) which implements extensive efforts to combat the spread of COVID-19, commonly referred to as coronavirus as well as the economic impact of the virus. This new law includes requirements affecting the coverage under employer sponsored group health plans and health insurance issuers in the group and individual market. Specifically, the provisions affecting health plans focus on mandated coverage of COVID-19 testing. 

All group health plans (including grandfathered health plans) are required to provide full coverage for COVID -19 testing which includes both the FDA approved in-vitro diagnostic procedures used for the detection of SARS-CoV-2 or the diagnosis of the virus that COVID-19 as well as the cost of administering the in-vitro diagnostic products (i.e., testing). The new law also requires group health plans to provide coverage for any health care provider office visit (either in-person or telehealth services), urgent care visit or emergency room visit if such visit results in a COVID-19 test or an order for a test to be administered. The rules also require a group health plan to cover any visit that involves the evaluation of an individual to determine if a COVID-19 test is needed. For purposes of this rule, coverage is required to be provided at “no cost” which means that the plan cannot impose any cost sharing limits (i.e., deductible, copay or co-insurance). Plans are also prohibited from imposing any prior authorization or medical management requirements on the in-vitro diagnostic products or associated healthcare provider visit.

Group health plans and health insurance issuers are required to comply with these new mandated coverage requirement immediately although it does not appear that testing provided prior to the effective date of the law will be subject to these provisions. Employers should also be aware that the more than 500 employee exception referenced in the leave related portion of the law does not extend to the mandated coverage requirement. As a result, all employer should be prepared to make the necessary changes to their plan in order to ensure that their plan complies with the new law.

One of the questions raised by the requirement for group health plans to provide no cost coverage for COVID-19 testing is how this mandated coverage would impact a group health plan’s status as a high deductible health plan for purposes of determining HSA eligibility. By way of background, an individual is eligible to contribute to an HSA only if he/she is enrolled in a high deductible health plan that satisfies certain requirements including minimum deductibles and out-of-pocket expenses. As a result, absent some form of relief, any treatment or service covered by a group health plan prior to the satisfaction of the plan deductible would be disqualify a plan from being considered a qualifying high deductible health plan for purposes of the HSA requirements. 

Fortunately, the IRS released guidance in Notice 2020-15 which adds a specific exception to the high deductible health plan requirements for any plan that provides “no-cost” coverage for COVID-19 testing. The guidance issued in this notice actually predates the passage of the FFCRA, but the applicability of this exception remains unchanged. In fact, the exception under the notice is actually more expansive than the mandated coverage requirement in that it provides an exception for both COVID-19 testing as well as treatment. As a result, a group health plan that satisfies the requirements as a qualifying high deductible health plan will not fail to be considered a high deductible health plan solely because it provides coverage for COVID-19 tests and/or treatment prior to the satisfaction of the plan’s deductible.

Additional guidance will be forthcoming from the various applicable agencies including the IRS and the DOL. We will continue to update you as information becomes available. We understand that these are challenging times for everyone and every situations may be different. As always please do not hesitate to contact our office if we can assist you with navigating any issues you may have during this period.

Alexandra A. Ifrah is a partner in the Employee Benefits Practice Group of Friday, Eldredge & Clark and serves on the firm's Management Committee. Since joining the firm in 1999, Alexandra has concentrated her practice on the representation of employers from a myriad of industries in complex employee benefits, taxation and executive compensation matters. 

Joshua M. Osborne is a partner in the firm’s Employee Benefits and Executive Compensation Practice Group. His practice focuses on providing counsel to clients on all aspects of their welfare benefits, retirement plans and executive compensation arrangements. 

 Disclaimer: The information included here is provided for general informational purposes only and should not be a substitute for legal advice nor is it intended to be a substitute for legal counsel. For more information or if you have further questions, please contact one of our Attorneys.