Archived Insight | December 10, 2020

Prepare Yourself: Covering the COVID-19 Vaccine

As we anticipate emergency FDA approval of the new COVID-19 vaccines, we've developed some guidance on what plan sponsors may need to do next.

If you have any questions at all, please don't hesitate to contact us.

Mid Adult Man Getting A Vaccine Shot Nurse In Protective Workwear Injecting It With Syringe

Here are the key points

  1. The federal government will purchase the vaccine and allocate supply to the states for prioritized distribution.
  2. During this time, the federal government will cover the ingredient cost of the vaccines, but non-grandfathered plans will be required to cover the administration costs charged by health care providers and facilities without cost sharing.
  3. Coverage must begin within 15 business days of approval by the director of the CDC of a recommendation from the CDC’s Advisory Committee on Immunization Practices.
  4. During the Public Health Emergency period, non-grandfathered plans are also required to cover these charges out-of-network and pay a “reasonable” rate to the out-of-network provider. Medicare rates will be considered reasonable.

Have questions about these action items? Contact us.

Female Doctor And Patient In Personal Protective Equipment At Medical Exam Female Doctor And Patient In Personal Protective Equipment At Medical Exam

Medicare fees for vaccine adminstration

The Medicare fee schedule (for the administration cost) is:

  • $16.94 for the first vaccine dose
  • $28.39 for the second dose for those vaccines requiring two doses
  • $28.39 for vaccines requiring a single dose only

We expect most health insurers/PBMs/TPAs to charge similar fees to administer the vaccine.

Contact your vendor to confirm administrative fees

We also expect a wide range of vaccination rates for each group, based on survey results as to the likelihood adults will get vaccinated.

But we should expect the plan cost impact to be under 1% of total medical plan costs for 2021.

We suggest you contact your vendor account manager to confirm administrative fees they will pass on to plans and pharmacies or other health care facilities.

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Coverage will likely fall within current premiums

We're anticipating that insured plans will provide coverage within the current premiums for 2020 and 2021. 

Other key points

Self-insured plan sponsors will also need to determine whether to cover this in their medical or pharmacy benefits.

Segal is recommending coverage in both settings to maximize access and minimize member confusion. When covered in the medical benefit, there may also be an office visit charge if received in an office setting.

Plans should review current plan documents detailing how other vaccines are currently covered and determine if any amendments to plan documents may be required.

Please work with your compliance expert to review plan documents. Grandfathered plans are not required to cover the vaccine (with or without cost sharing), but will likely choose to do so (or the terms of their plan may require them to do so), and must make similar coverage decisions to non-grandfathered plans.

Because of the handling issues (extreme cold storage for some vaccines) and other distribution issues, the vaccine is likely to be provided by major pharmacy chains and hospital based outpatient facilities.

We expect that administration sites will vary by state and will change over time as new vaccines are approved (e.g. some vaccines have less stringent handling requirements).

Questions about what actions to take now?

Please feel free to contact us with any questions. 

Either our health compliance leaders or the pharmacy consulting practice will get back to you.


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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.