Archived Insight | March 16, 2020

Group Health Plans and COVID-19: What You Need to Know

Effective January 27, 2020, Health and Human Services (HHS) Secretary Alex M. Azar II declared a public health emergency for the entire United States to aid the nation’s healthcare community in responding to the coronavirus.

State governments have taken a variety of actions. Many states have ordered state licensed health insurance companies and health maintenance organizations to cover coronavirus testing with no charge to the patient. These requirements apply to fully insured plans in those states.

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FAQs about group health plans and the coronavirus

Below, we cover some frequently asked questions about the coronavirus and group health plans.

Should my self-insured group health plan cover coronavirus testing?

Sponsors of self-insured group health plans, including those with an administrative services only (ASO) contract with an insurer, may decide how to cover COVID-19 testing.

For example, they may decide that testing can be covered at 100 percent with no cost sharing. We understand that ASO providers have been contacting self-insured plan sponsors with a short deadline to make a decision as to whether to cover the tests without cost sharing.

Plan sponsors should review the additional costs of such coverage, but may wish to approve paying for coronavirus testing and treatment in light of the need to remove barriers to testing and avoid administrative delays.

Plan sponsors should communicate any temporary changes in plan benefits to participants and monitor ASO communications and reach out if they have not been contacted.

We offer an HSA-Qualified High-Deductible Health Plan (HDHP). Can this plan cover testing and treatment for coronavirus before the deductible is met? Would that invalidate our HDHP?

On March 11, 2020, the IRS published Notice 2020-15, which provides that a health plan that is otherwise an HDHP will not fail to be considered an HDHP merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self-only or family) for an HDHP.

The IRS cited as its rationale the unprecedented public health emergency posed by COVID-19 and the need to eliminate potential administrative and financial barriers to testing for and treatment of COVID-19. It also noted that it continues to consider vaccinations preventive care for purposes of determining whether a health plan is an HDHP (though there is no vaccine for COVID-19 yet).

Read the IRS notice.

Does Notice 2020-15 allow our HSA-qualified HDHP to cover telemedicine visits before the deductible is met?

In part. Notice 2020-15 is written broadly to apply to any benefits associated with for testing for and treatment of COVID-19.

Consequently, if the HDHP provides benefits for services such as telemedicine, office visits, urgent care or emergency care visits that are provided for testing and treatment of COVID-19, the services could be covered before the deductible is met.

However, it is likely questions will arise as to the specific services and criteria that would be used to meet this standard. Plan sponsors should talk to their plan administrator and legal counsel about interpretation of the Notice.

May a group health plan sponsor add a temporary benefit for services, such as telemedicine coverage, during the public health emergency?

Yes. We have seen several plan sponsors add benefits during this emergency.

For example, plan sponsors may wish to expand telemedicine coverage beyond employees to dependents, or consider other innovative plan designs to help plan participants obtain coverage.

Any design changes should be reviewed for compliance with existing laws and regulations.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.