COVID-19 benefit changes: Action required for employer health insurance plans

This article reflects guidance issued through July 31, 2020; additional changes are possible in the future as the national emergency continues to unfold.

Recently enacted COVID-19 legislation and related federal guidance require some mandatory group health plan benefit changes and offer other voluntary changes you can elect to provide temporary relief to employees. Be aware that some of the changes require that you notify participants via a summary of material modification (SMM) or an updated summary plan description (SPD).

Now you have some work to do: Deciding which relief options to offer and notifying participants about the changes with an SMM or updated SPD. Communication is crucial, especially during this current crisis. With so many uncertainties these days, notifying participants about relief offered through their benefit plans can bring comfort and appreciation for their benefits.

Mandatory group health plan benefit changes

COVID-19 testing coverage

All group health plans (including high-deductible health plans) must cover COVID-19 testing and the doctor's visit at 100% of the cost (with no cost sharing required of the employee). The plan must pay 100% of the incurred cost of a visit during which a COVID-19 test is administered or ordered, regardless of whether the provider is in- or out-of-network. This includes the cost of items and services related to the administration of a COVID-19 test in a variety of settings: office visits, urgent care, emergency room, drive-through, and telehealth.

When it comes to treatment of COVID-19, however, a recent publication by the U.S. Department of Labor affirms that employers have no mandatory responsibility to waive cost sharing for treatment of COVID-19 symptoms, and the plan's normal deductibles, copays, and coinsurance may apply.

Suspension of deadlines during the "outbreak period"

The outbreak period for the COVID-19 crisis has been defined as beginning March 1, 2020, and ending 60 days after the national emergency period ends. As of mid-August (the publication of this article), the national emergency period has not ended. Certain group health plan compliance deadlines that would fall during this time have been paused until the national emergency ends. These changes apply to ERISA plans (both health and retirement plans).

What deadlines are affected?

• HIPAA special enrollment, such as the 30-day election period following marriage, birth, or adoption of a child or loss of other coverage. As an example, if a participant was married on February 14, typically that person would have until March 15 to enroll a new spouse. That deadline is suspended during the outbreak period, and the participant will have until 15 days (time remaining in the original special enrollment period) after the end of the outbreak period to make changes. If, for example, the outbreak period ended on October 1, the participant would have until October 15 to enroll the new spouse.
• Most participant COBRA deadlines, such as the 60-day period to elect COBRA and all COBRA payment deadlines. This delay gives qualified individuals and beneficiaries significantly more time to evaluate whether COBRA coverage is desirable or affordable, because they can wait until the end of the outbreak period and elect to pay for coverage retroactively.
• Health flexible spending account (FSA) claim filing deadline. If the original deadline was March 31, 2020, for example, the new deadline will be 31 days after the end of the outbreak period. (Because they are non-ERISA plans, dependent care FSAs are not subject to this rule.)
• ERISA claims and appeals deadlines for benefit claims, appeals of adverse decisions, and requests for external reviews of decisions are also delayed; claims are not required to be filed until the end of the outbreak period.

Keep in mind: Participants don't have to wait until the end of the outbreak period to enroll or submit claims.

Voluntary group health plan benefit changes

In addition to these mandatory updates, recent federal guidance allows other voluntary changes to group health plans. If you choose to implement any voluntary provisions, they should also be included in your communication to participants.

For group health plans, you might be considering:

• Relaxing deadlines for cafeteria plan elections
• Allowing employees to make certain midyear changes to health plan and FSA elections
• Extending the 2019 FSA grace period for incurring claims to December 31, 2020
• Increasing the health FSA carryover from $500 to $550

Show support for your employees

Employees need to hear from you during these challenging times--especially with some good news. Take a close look at what you can do with your benefits program to ease the pressure on employees and support them in some very practical ways.