Archived Insight | June 24, 2020

Plans Not Required to Cover COVID-19 Tests in All Situations

On June 23, 2020, the Departments of Labor, Treasury, and Health and Human Services released new answers to frequently asked questions (FAQs) that clarify key issues for health plan sponsors working to implement requirements related to COVID-19 under the Families First Coronavirus Response Act and the CARES Act.

Doctor's home visiting during the quarantine

COVID-19 tests and related services

The FAQ answers clarify that:

  • Group health plans (and insurers) are not required to cover tests for employment purposes or public health surveillance. The requirement to cover COVID-19 tests without cost sharing applies only to tests intended for individualized diagnosis or treatment of COVID-19 or another medical condition, as determined by an attending healthcare provider.
  • Only COVID-19 tests that meet federal standards must be covered at no cost by group health plans and insurers. The FAQ answers provide extensive information about how plan sponsors can consult the FDA website to determine if the test is one that is covered by the law. Plans and insurers may take reasonable steps to verify that the test meets applicable requirements. Doing so will not violate the prohibition on medical management.
  • Group health plans must cover COVID-19 tests intended for at-home testing (including when the individual performs self-collection at home) when the test is one that meets government standards and is ordered by an attending healthcare provider who has determined that the test is medically appropriate.
  • There is no limit on the number of tests that must be covered without cost sharing, provided the tests are medically appropriate as determined by an attending healthcare provider.

The FAQ answers provide additional information about payment for tests in an emergency room setting. They also note that the Cares Act does not permit balance billing for tests, but does not address balance billing for items and services other than the test.

Notice requirements

Rules applicable to the ACA-required Summary of Benefits and Coverage (SBC) generally require 60-day advance notice of a material plan change that takes place mid-year and that affects the content of the SBC. Answers to earlier FAQs announced an enforcement safe harbor for COVID-19-related benefit enhancements during the public health emergency or the national emergency declaration period. Plan sponsors only needed to provide reasonable notice of the benefit enhancements.

This latest set of FAQs clarifies that:

  • Group health plans that reverse these benefit changes once the emergency ends will be treated as meeting any SBC-related notice requirements if the plan sponsor (1) previously notified participants that the enhancements were time-limited (for example, lasting for the duration of the emergency) or (2) notifies participants within a reasonable timeframe in advance of the reversal.
  • Group health plans that are grandfathered under the ACA will not lose their grandfathered status if they temporarily enhance benefits during the public health emergency and reverse those changes at the end of the emergency.

Telehealth offered to non-participants

For the duration of any plan year that begins before the end of the public health emergency, large employers may offer telehealth and other remote-care services to employees (and their dependents) who are not eligible for the employer’s group health plan. Such an arrangement would not be subject to most of the group market reforms otherwise applicable to a group health plan. Requirements that continue to apply include protections against discrimination based on health status, the Mental Health Parity and Addiction Equity Act, and the prohibition on retroactive termination of coverage (i.e., rescissions).

Mental Health Parity and Addiction Equity Act (MHPAEA) testing

Plan sponsors assessing their compliance with MHPAEA must meet specific mathematical tests to determine what cost-sharing requirements may be applied to mental health and substance use disorder benefits. Waiving cost sharing applicable to certain medical benefits within a classification (such as in-network outpatient services) could have an impact on these calculations.

An answer to a new FAQ announces that the departments will allow plan sponsors to disregard temporary cost-sharing waivers required by the Families First Coronavirus Response Act in determining compliance with MHPAEA’s mathematical tests.

Wellness program waivers

Some plan sponsors have recognized that the public health emergency has made it difficult for participants and family members to meet the requirements for earning a reward under a health-contingent wellness program. One FAQ answer confirms that plans may waive requirements for obtaining a reward under such a wellness program as long as the waiver is offered to all “similarly situated” individuals.

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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.