HEALTH & WELFARE
JOURNAL OF PENSION BENEFITS
ISSUES IN ADMINISTRATION, DESIGN, FUNDING, AND COMPLIANCE
Volume 30 • Number 3 • Summer 2023
In response to the Covid-19 emergency, a national emergency and a public health emergency were declared in 2020 and extended until 2023. Those emergencies are now coming to an end, with important implications for health and welfare plans. This column summarizes the impact of these changes, including recent guidance in the form of FAQs that were prepared jointly by the Departments of Labor, Health and Human Services, and the Treasury Department and published on March 29, 2023.
By Sherrie Boutwell
Sherrie Boutwell is a founding partner of Boutwell Fay LLP and has focused for 30 plus years in the areas of employee benefits law and ERISA. She is a highly sought-after advisor, speaker and writer on employee benefits topics and takes pride in bringing a practical and down-to-earth approach to resolving complex benefits issues involving qualified, nonqualified, and health and welfare plans.
March 13, 2020. May 11, 2023. After three years, two emergency orders, two major pieces of benefits legislation, and a variety of regulatory guidance about how to apply all of the above, the Covid-19 emergency and related public health emergency are finally coming to an official end. This column describes the impact on employer-sponsored health and welfare plans and suggests next steps for plan sponsors and administrators.
In response to the Covid-19 emergency, a national emergency and a public health emergency were declared in 2020 and extended until 2023. During that period, Congress passed two major pieces of legislation tied to the declaration of the national Covid-19 emergency: (1) the Families First Coronavirus Response Act (FFCRA) [Public Law No. 116–127, Mar. 18, 2020]; and (2) the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) [Public Law No. 116–136, Mar. 27, 2020].
On orders from President Biden, the Covid-19 National Emergency and Public Health Emergency were expected to end on May 11, 2023 [https://www.whitehouse.gov/briefing-room/presidential-actions/2023/02/10/notice-on-the-continua-tion-of-the-national-emergency-concerning-the-coronavirus-disease-2019-covid-19-pandemic-3/], triggering a host of mandated and optional changes to benefits under both health and welfare and retirement plans that would generally take effect on July 10, 2023. In anticipation of this, on March 29, 2023, the US Department of Labor (DOL), US Department of Health and Human Services (HHS) and the US Department of the Treasury issued an FAQ regarding implementation of the emergency wind-down [https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-58.pdf]
Then, just as we were going to press, Congress passed, and on April 10, 2023, President Biden signed, Joint Resolution 7 [P.L. No. 118-3, April 10, 2023], ending the Covid-19 National Emergency (but not the Public Health Emergency) a month early. Hopefully, the above agencies will update their FAQ to take this into account. To complicate matters even further, on March 30, 2023, a federal judge in Texas struck down certain aspects (including with respect to some preventative care) of the Affordable Care Act [Braidwood Management, Inc. v. Becerra, No. 20-0283 (N.D. Tex. Mar. 30, 2023)], which may also affect some aspects of all of this. That decision is now on appeal and a stay is expected. So, it is all a bit of a moving target, to say the least.
This column summarizes these various developments and their impact on health and welfare plans. Please note that this is only a brief summary of a complex set of rules and extensive guidance.
Implications for Health and Welfare Plans
Which Laws Apply?
The implications of the end of the Covid-19 emergencies for health and welfare plans will vary depending on the type of plan, applicable law (ERISA/Non-ERISA, state, federal, other) and whether the plan is self-funded or fully insured. For example, for insured plans, many if not most of those insurance contracts will remain in place for the rest of the year. This discussion focuses on federal law only, but many states have their own laws and not every law is pre-empted by the Employee Retirement Income Security Act of 1974 (ERISA)—state insurance laws and regulations are not. Plan sponsors will need to take an inventory of which laws apply to which plans and when their actual policies and contracts are renewed before they start acting based on the end of the federal emergencies. In addition, many plan sponsors will have good business reasons to voluntarily continue some of the coverages and plan designs that were previously mandated, and the federal agencies are encouraging plan sponsors to do just that.
What Is Affected and When?
The joint agency FAQ issued on March 29 explains many of the impacts:
Covid-19 Vaccines and Testing. As of May 11, 2023, health plans will no longer be required to offer free vaccination and testing for Covid-19 for out of network providers.
COBRA/HIPAA/Claims Procedure. Certain time periods and dates for the Health Insurance Portability and Accountability Act of 1996 (HIPAA) special enrollment, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage, and internal claims and appeals and external review were required to be disregarded during the COVID-19 National Emergency. Those disregarded periods applied from the date each individual or plan was first eligible for relief until the earlier of (a) 1 year from the date they were first eli-gible for relief, or (b) 60 days after the announced end of the COVID-19 National Emergency. These rules are quite complicated, and the FAQ issued on March 29, 2023, gives additional details and examples of how these rules should be applied. Of course, plans and issuers are permitted to be more generous than the legal requirements.
Employee Assistance Programs. Covid-19 testing and diagnosis may no longer qualify as “significant” medical care.
High Deductible Health Plans. Under Notice 2020-15 [I.R.B. 202-15, April 6, 2020], pre-deductible Covid-19 testing, and treatment was specifically allowed. The agencies are currently considering extending this treatment and have stated that any future modifications to the guidance previously provided in Notice 2020-15 generally will not require changes in the middle of a plan year.
Mental Health Parity. The regulatory agencies charged with enforcing mental health parity laws have previously taken a non-enforcement position with respect to Covid-19 testing and other services. The recent FAQ referenced above does not address this issue, so the conservative view is that the nonenforcement position will no longer be in place and plan sponsors should review their plans to be sure this is taken into account in their parity analysis going forward.
What Should Plan Sponsors Do Now?
Under the new FAQ, if a plan or issuer makes a material modification to any of the plan or coverage terms that would affect the content of the summary of benefits and coverage (SBC), that is not reflected in the most recently provided SBC, and that occurs other than in connection with a renewal or reissuance of coverage, the plan or issuer must provide notice of the modification to participants and enrollees not later than 60 days prior to the date on which the modification will become effective.
However, if a plan or issuer made changes to increase benefits or reduce or eliminate cost sharing for the diagnosis or treatment of COVID-19 or for telehealth or other remote care services and revokes these changes upon the expiration of the public health emergency, then 60 day advance notice is not required if the plan either (a) previously notified the participant/dependent, of the general duration of the additional benefits coverage or reduced cost sharing (such as, that the increased coverage applies only during the public health emergency), or (b) notifies the participant, beneficiary, or enrollee of the general duration of the additional benefits coverage or reduced cost sharing within a reasonable timeframe in advance of the reversal of the changes.
Other steps might include plan amendments, review of the status of claims and appeals, plan ahead for the impact on service providers, consider whether to extend certain telehealth benefits, and, as mentioned above, consider the impact on the plan’s mental health parity comparative analysis.
The end of the Covid-19 national emergency and public health emergency brings many changes for health plans and plan participants, with both Congress and the various regulatory agencies making decisions even as this change is unfolding. Plan sponsors will want to meet with their advisors promptly to map out a game plan to deal with this change and provide notice of any changes to participants as soon as possible. ■
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Reprinted from Journal of Pension Benefits, Summer 2023, Volume 30, Number 4,
pages 30–32, with permission from Wolters Kluwer, New York, NY,