Compliance News | October 14, 2022
Effective October 13, 2022, the federal government extended the COVID-19 public health emergency for at least an additional 90 days.
This is the eleventh 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 January 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, 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 170 million updated COVID-19 boosters for a vaccination campaign this fall and winter. The ingredient costs of the vaccines will be 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. Similarly, HHS stated it expected to transition payment for oral antiviral COVID-19 medications, such as Paxlovid, in mid-2023. 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.
Congress took action in September 2022 to fund the government until December 16, 2022. That funding bill included disaster relief and aid to Ukraine, but did not include COVID-19 funding. Congress will return after the November mid-term election to consider end-of-the-year funding bills.
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.
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