On March 29, 2023, the DOL released FAQs regarding the impact to health plans due to the end of both the National Emergency and Public Health Emergency periods on May 11, 2023.
Soon after on April 10, 2023, the president signed a resolution formally terminating the COVID-19 National Emergency period.
Summarized below are the impacts to 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 one last time through May 11, 2023.
When the PHE ends on May 11, 2023, Q/A#1 confirms health plans will no longer be required to cover COVID-19 diagnostic tests (including OTC tests) and related services without cost sharing, but encourages continued coverage after the PHE ends. However, health plans will still be required to cover recommended preventive services, including qualifying coronavirus preventive services and all COVID-19 immunizations without cost sharing, but this coverage requirement will be limited to in-network providers (see Q/A#4).
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.
Any continuation of COVID testing and treatment with no cost-sharing will not affect the status of a qualified high-deductible health plan (see Q/A#8). Thus, an individual covered by an HDHP that covers these treatments prior to the satisfaction of the minimum deductible may continue to contribute to an HSA until further guidance is issued.
In addition, Q/A#2 confirms that mid-year changes may be considered a material modification that affects the information listed on the SBC (outside of renewal/open enrollment) and would require a new SBC to be issued 60 days prior to the effective date of the change. However, if the SBC’s information is not impacted, then unless prior notice was already given during the 2023 plan year, a summary of material modification (SMM) within 60 days of the change should be provided to all plan participants (including retirees and COBRA participants).
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 (60-day for termination of Medicaid or CHIP) 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 National Emergency now terminated on April 10, 2023, the 60-day clock to sunset the Outbreak Period will presumably start earlier than anticipated. This might mean that all of the items above would revert back to their normal timeframes effective June 9th, 2023 (60 days after the end of the National Emergency Period effective April 10th). However, the administration’s announcement that the National Emergency would end on May 11, 2023 and the agencies FAQs anticipating that the outbreak period would end July 10, 2023 brings the June 9th date into question. Therefore, the most conservative option may be to rely upon the original July 10th date unless clarification is issued.
Expiration of Medicaid/CHIP Continuous Enrollment Condition
Due to the end of the continuous enrollment condition, many employees and dependents who are currently enrolled in Medicaid or CHIP coverage may lose eligibility for that coverage after March 31, 2023. With few exceptions, state Medicaid agencies have not terminated coverage for any beneficiary who was covered at any time on or after March 18, 2020. Many states are beginning to unwind this “continuous enrollment” and resume eligibility determinations for Medicaid coverage. These determinations may result in some employees and dependents losing coverage. Employers and plans are encouraged by the DOL to ensure that employees who may be impacted know their special enrollment right to enroll into the group health plan. A helpful flyer to give employees has been published by the DOL. Employers should also provide additional time for individuals to exercise their special enrollment rights, to help ensure that these individuals can maintain health coverage (see Q/A#6).
As a result of the end to 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, enrollment opportunities for those losing Medicaid or CHIP and end to extended timeframes.
The DOL also published two helpful blogs that employers will want to review and consider providing to employees:
Employer-facing info: https://blog.dol.gov/2023/03/29/what-does-the-end-of-the-covid-19-public-health-emergency-mean-for-health-benefits
Employee-facing info: https://blog.dol.gov/2023/03/29/five-important-changes-to-your-health-coverage-once-the-covid-19-public-health-emergency-ends