On March 18, 2020, the President signed into law the Families First Coronavirus Response Act, which requires, among other things, that group health plans cover COVID-19 testing and related provider visits with no out-of-pocket costs. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted March 27, 2020, and later agency FAQs and guidance provided more implementation guidance. We provide an overview of the provisions most relevant to large employers below.
COVID-19 Testing: No Out-of-Pocket Costs
Effective March 18, 2020, all group health plans—insured and self-insured—must cover COVID-19 testing without cost-sharing (no deductibles, copayments, coinsurance) and without prior authorization or other medical management requirements. Specifically:
- Coverage includes items and services furnished during office, telehealth, urgent care, and emergency room visits, provided the items/services are related to the furnishing or administration of testing or evaluation to determine the need for testing.
- Covered testing includes all FDA-approved COVID-19 testing and tests: (1) for which the developer has requested or intends to request emergency use authorization from the FDA, (2) developed in or authorized by a state, and (3) deemed appropriate by HHS.
- Plans must reimburse testing providers the negotiated rate that was in effect before the COVID-19 public health emergency.
- If a plan did not have a negotiated rate, the plan must reimburse at a cash price that the CARES Act requires providers to publish. Plans also have the option of negotiating a price lower than the cash price.
FAQs from the Department of Health and Human Services (HHS), Department of Labor (DOL), and the Internal Revenue Service (IRS) provide additional details:
- The testing coverage requirements are effective through the COVID-19 public health emergency. Currently, the public health emergency is set to expire on 6/16/2020, although HHS may terminate or extend this period.
- Coverage must include in- and out-of-network providers.
- Coverage must extend to non-traditional care settings, including drive-through screening/testing sites where licensed providers are administering COVID-19 testing.
- Coverage includes items or services related to the furnishing or administration of a test or to evaluation of an individual to determine the need for a test, as determined by the attending healthcare provider.
- If a provider determines that other tests (e.g., influenza, blood tests) are needed to determine the need for COVID-19 testing and the visit results in an order for or administration of a COVID-19 test, the plan must cover the COVID-19 test and related tests.
- Required testing coverage also includes serological tests used to detect antibodies. Currently, there is only one emergency use authorization for this type of test, and the test is not recommended by the FDA as the sole basis for COVID-19 diagnosis.
- Employee assistance programs (EAPs) can cover benefits for COVID-19 diagnosis and testing during the COVID-19 public health emergency and still be considered HIPAA excepted benefits. This guidance creates a path for employers to offer testing benefits to employees who are not enrolled in the employer’s group health plan.
- Onsite clinics can offer COVID-19 diagnosis and testing and still be considered HIPAA excepted benefits. This guidance creates another path for employers to offer testing benefits to employees who are not enrolled in the employer’s group health plan.
- Employers should provide notice to plan participants of additional testing benefits and cost sharing changes as soon as reasonably practicable. However, agencies will not take enforcement action if employers do not provide the 60 days advance notice that is usually required.
In addition, the IRS has provided guidance for HSAs paired with HDHPs. Specifically:
- HSA/HDHPs can cover COVID-19 testing and treatment before participants satisfy their deductibles.
- HSA/HDHPs can provide pre-deductible coverage for all testing-related items and services detailed above on or after 1/1/2020 (IRS Notice 2020-29).
- Vaccinations continue to be considered “preventive” under the HSA rules. Therefore, if a COVID-19 vaccine becomes available, HSA/HDHPs will be able to provide pre-deductible coverage.
We recommend that employers:
- Discuss with their third-party administrators and other vendors (1) how their group health plans will implement this coverage, including any payment, coding, and billing changes that may be needed; (2) how to handle in- and out-of-network coverage for testing; (3) future testing options; and (4) testing coverage after the public health emergency ends.
- Determine how to communicate coverage changes to participants;
- Amend plan documents and SPDs, as necessary; and
- Amend provider agreements, if necessary.
What happens next?
We expect that the Department of Health and Human Services, Department of Labor, and Internal Revenue Service will continue to issue guidance. The Business Group will provide updates as this guidance becomes available.
- FAQS about Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation
- Webinar – The Families First Act, CARES Act, and Your Workforce in Transition
Do you have regulatory/compliance questions related to COVID-19? Please contact us.