Compliance News | January 23, 2023
Effective January 11, 2023, the federal government extended the COVID-19 public health emergency for at least an additional 90 days.
This is the twelfth extension of the emergency, which the secretary of the Department of Health and Human Services (HHS) declared on January 31, 2020 (retroactive to January 27, 2020). The HHS secretary could terminate the public health emergency earlier than April 11, 2023 or extend it again.
Before the public health emergency expires, HHS has indicated it will give at least a 60-day notice.
This public health emergency declaration is important to group health plan sponsors because it determines the period during which group health plans and insurers must pay for COVID-19 tests (including certain over-the-counter tests) and related services without charging cost sharing. In addition, during this period non-grandfathered group health plans and insurers must cover COVID-19 vaccines without cost-sharing both in and out of network. After the public health emergency expires, non-grandfathered plans may limit COVID-19 vaccine coverage to in-network providers. To learn more, see our December 15, 2020 insight, “Most Plans Must Cover COVID-19 Vaccine Without Cost Sharing.”
The administration has procured over 1.2 billion COVID-19 vaccines to date. The ingredient costs of the vaccines are free, but plans are required to cover administration costs charged by healthcare providers and facilities without cost sharing. During the public health emergency, out-of-network provider administration costs must be covered at a reasonable rate, such as the Medicare rate (approximately $40 for single-dose vaccines).
HHS announced on August 30, 2022 that as early as January 2023, the administration anticipates no longer having federal funds to purchase or distribute vaccines and will need to transition vaccine payments to the commercial market, similar to seasonal flu or other vaccines. While it is not known what price group health plans would have to pay for the vaccines, it is likely to be higher than that paid by the government for its bulk purchases. Consequently, group health plan sponsors that cover COVID-19 vaccines and medications may see costs increase as the federal government transitions away from paying ingredient costs.
As the public health emergency ends, plan sponsors should review plan coverage for COVID-19 and related costs and determine how to address these costs with the potential of decreased federal funding.
Other plan requirements, most notably the requirement to extend certain deadlines related to COBRA, special enrollment, and claims and appeals, are pegged to a different COVID-19 emergency declaration — the national emergency. President Trump made that declaration on March 13, 2020, retroactive to March 1, 2020. That emergency declaration does not expire automatically. On February 18, 2022, President Biden extended the national emergency until March 1, 2023.
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.