Seyfarth Synopsis: On April 11, the IRS, DOL and HHS issued a series of FAQs clarifying the scope of the FFCRA/CARES Act mandates relating to COVID-19 testing for group health plans and health insurance issuers. This post highlights the key takeaways from those FAQs.
As highlighted in our earlier blog post, it was only a few months ago that the Trump Administration issued a series of Executive Orders downplaying the significance of sub-regulatory guidance (or even formal guidance) that goes beyond the four corners of the law. That was pre-pandemic, and it appears the Administration has recognized that going through the formal rulemaking process to address the import of the FFCRA and CARES Act on group health plans would be fruitless as that could extend beyond the emergency period.
The DOL/HHS/IRS FAQs issued over the weekend attempt to clarify a number of burning questions that arose in the wake of the fast-tracked congressional action (covered here, here, here and here). We attempt to summarize notable points from the FAQs below:
- Scope of Plans Subject to Guidance. There has been some question as to which benefit programs, perhaps tangentially related to medical care, are covered by the new legislation.
- Excepted Benefits. The FAQs confirm that the guidance only applies to “group health plans” and health insurance issuers, but not to excepted benefits offered through employers.
- Retiree-Only Plans. Further, consistent with the statutory language, the FAQs provide that the FFCRA does not apply to “retiree-only” plans (i.e., those covering fewer than two active employees). Retiree-only plans may still desire to implement low-cost or no-cost testing, but they have more flexibility to do so (including, if desired, limiting or imposing cost-sharing in the non-network setting) because they are doing so at their discretion rather than in response to a mandate.
- Effective Date/Expiration Date. The FAQs clarify that the guidance requiring free COVID-19 testing applies for services or supplies rendered on or after March 18, 2020, and expires on June 16, 2020, unless the public health emergency is extended.
- Scope of Coverage Requirements. The legislation appeared to limit required first dollar coverage to testing services, but left some room for interpretation as to what was covered and whether plans may impose other normally required conditions.
- Mandate Includes Blood Tests to Detect Antibodies. In an important clarification, the FAQs clarify that plans must not only cover the costs of screenings to detect a current COVID-19 infection, but they also must cover blood tests to detect antibodies that would indicate the individual previously had COVID-19. It has been widely reported that these “immunity” tests are coming online shortly as an important component of “reopening” the country, but to date it wasn’t clear whether this was included in the testing mandate.
- Coverage for Testing Relating to Other Respiratory Conditions. While the FAQs confirm that the plan must only cover the cost of services if the visit results in the order for or administration of a COVID-19 screening, they also clarify that if the visit results in other related respiratory tests, (e.g., influenza tests, blood tests), those services must also be covered by the plan at no cost to participants.
- Limit on Medical Management Requirements. The FAQs confirm that the plan cannot impose cost-sharing, prior authorizations or medical management requirements on testing or related services. They clarify, however, that the no-cost mandate only applies to services that are “medically appropriate for the individual, as determined by the individual’s attending healthcare provider in accordance with accepted standards of current medical practice.” The FAQs go on to make clear that the plan/issuer/hospital/managed care organization is not the attending healthcare provider.
- Reimbursement for Non-Network Providers. There was some confusion based on the drafting of the FFCRA (as amended by the CARES Act) as to whether the non-network provider mandate dictated the reimbursement rate for all services provide in a non-network setting in connection with a COVID-19 screening, or only for the testing. The law appears to only require that the provider publish a cash rate for the test itself (not for other services, including the office visit). That said, the FAQs appear to indicate that the DOL believes providers are required to post all related costs (and that the plan must reimburse for those costs or a lesser rate, if negotiated).
- 60-Day Advance Notice Requirement Waived. Post-ACA, plans making mid-year changes that would impact the terms of their Summary of Benefits and Coverage (SBC) were required to provide 60 days advanced notice. The DOL has adopted a non-enforcement standard for purposes of implementing coverage to comply with the COVID-19 mandate or other optional design changes intended to enhance plan offerings to address the pandemic (e.g., expansion of telemedicine). The DOL would still require that plans provide notice of changes as soon as possible.
- Covering COVID-19 Screenings Under an Excepted Benefit. Some employers have explored setting up a “COVID-19-testing-only” plan for part-timers and others who are not otherwise eligible for their health plan. In the normal course, such an offering would constitute a “group health plan,” subject to the various federal mandates, including the preventive care mandates, and rendering participants ineligible for Marketplace tax credits. As such, employers were shying away from taking this step. The DOL FAQs, however, suggest that it would be permissible to include COVID-19 diagnosis and testing in an EAP or an onsite clinic offering (benefits that could otherwise constitute excepted benefits) without rendering those benefits to be group health plans. Employers might now be more inclined to explore this route, especially because any such offering would be optional and not subject to the FFCRA/CARES Act mandates (e.g., employers could limit non-network testing or impose cost-sharing).
We expect that the agencies will eventually formalize this guidance through the official rulemaking process, but given the number of open issues that remain, the agencies may issue additional FAQs in the interim. For the time being, plan sponsors should continue to work toward implementing the required changes and notify participants in an expeditious manner in accordance with these guidelines.