With the ending of both the National Emergency related to the COVID-19 pandemic and the Public Health Emergency on May 11, 2023, plan sponsors and TPAs should be prepared to transition back to pre-pandemic benefits and administration.
To prepare for this transition, plan sponsors and TPAs must address two key issues. The first issue pertains to the continuation of specific benefits, including mandatory ones like COVID-19 diagnostic testing and vaccines, as well as optional benefits such as telehealth and employee assistance programs (EAPs). The second issue involves the tolling period known as the “Outbreak Period,” which applies to certain deadlines under all ERISA and Internal Revenue Code covered plans including group health plans. In this blog, we will discuss each of these issues as they relate to group health plans.
Continuation of Specific Benefits (Diagnostic Testing, Vaccines, etc.)
As of May 11, 2023, group health plans and health insurance issuers, including grandfathered health plans, will no longer be obligated to provide coverage for COVID-19 diagnostic tests (both over the counter and prescribed) and out-of-network COVID-19 vaccines. It should be noted that if the earliest date of an episode of a multistep COVID-19 test falls on or before May 11, 2023, the entire episode of care should be considered to have occurred during the Public Health Emergency, even if another part of the episode takes place after May 11.
The DOL and HHS are urging plans and issuers to maintain coverage for COVID-19 diagnostic tests, free from the previous limitations on cost-sharing, prior authorization, and other medical management requirements that were enforced during the Public Health Emergency. In the case of over-the-counter COVID-19 diagnostic tests, plans and issuers that choose to provide coverage are no longer required to meet the direct coverage safe harbor criteria for applying a cost-sharing cap on tests obtained from non-preferred providers. Furthermore, the restriction of eight tests per person per month for over-the-counter COVID-19 diagnostic tests can be adjusted.
Following the conclusion of the Public Health Emergency, coverage for in-network, approved COVID-19 vaccines must continue without cost-sharing for non-grandfathered plans. Additionally, the IRS will continue to recognize personal protective equipment (PPE) as a qualified medical expense. Consequently, Healthcare Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) that permit reimbursement for all eligible §213(d) medical expenses will continue to cover claims for PPE.
It should be noted that plans have a requirement to give a 60-day advance notice for significant midyear changes that would impact the content of the summary of benefits and coverage (SBC). However, plan sponsors who decide not to continue coverage of previously mandated benefits after May 11, 2023, may not have sufficient time to provide this 60-day notice. In previously issued guidance the DOL has indicated that once the federal emergencies come to an end, plan sponsors and issuers can fulfill the advance notice requirement for significant modifications if they have either:
Previously informed participants about the estimated duration of the additional benefits coverage or reduced cost-sharing.
Notified participants within a reasonable time frame prior to reversing the changes.
Special Consideration for Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs)
Under IRS Notice 2020-15, HDHPs are permitted to provide coverage for COVID-19 testing and treatment prior to meeting the deductible, without jeopardizing the eligibility of individuals to contribute to an HSA. This relief will continue to apply until the IRS revises or updates the guidance.
The Outbreak Period and its Application to Certain Deadlines
During the period of the National Emergency, specific deadlines and time frames for plan sponsors and participants were temporarily paused by disregarding the Outbreak Period. This applied to plans governed by ERISA or the Internal Revenue Code, including church plans. Additionally, HHS encouraged non-federal governmental plans to adopt the Outbreak Period as well.
The Outbreak Period which began on March 1, 2020, was set to conclude at either 60 days after the National Emergency ends, or on a future date specified by the EBSA and IRS The Outbreak Period will therefore end on July 10, 2023, which is 60 days after May 11, 2023, when the National emergency ended. Consequently, the paused period (i.e., the tolling period) for any relevant time frame will expire on the earlier of one year after the original triggering event date, or July 10, 2023. The “triggering event date” refers to the date when relief measures were first made available.
The Outbreak Period tolling period rules apply to the following:
- The 30-day period (or 60-day period for CHIP and Medicaid beneficiaries) to request HIPAA special enrollment.
- The 60-day election period for COBRA continuation coverage.
- The date for making COBRA premium payments (the 45-day grace period for the initial payment and the 30-day grace period for subsequent monthly payments).
- The date for individuals to notify a plan of a COBRA qualifying event or determination of disability.
- The date by which individuals may file a benefit claim under a plan’s claims procedure (applicable to both health and welfare plans and retirement plans covered by ERISA or the Code).
- The date by which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure (applicable to both health and welfare plans and retirement plans covered by ERISA or the Code).
- The date by which claimants may file a request for an external review after receipt of certain group health plan adverse benefit determinations or final internal adverse benefit determinations.
- The date by which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.
- Furnishing COBRA election notices.
Calculating the Tolling Period
The tolling period for events occurring on or before July 10, 2022, will be subject to the one-year rule, and the tolling period for events occurring on or after July 11, 2022, and before July 11, 2023, will universally end as of July 10, 2023. For this later group, July 11, 2023, will generally be “day 1” for purposes of starting the clock on the applicable time period.
Following are examples illustrating the difference in the one-year rule and the simplified method:
Example 1: COBRA election period. When an individual receives a COBRA election notice, they have a 60-day period to make a COBRA election.
- If the COBRA election notice is received before July 11, 2022, the 60-day notice period starts counting one year after the date the election notice is received. The deadline for making a COBRA election is one year and 60 days from the receipt of the notice.
- If the COBRA election notice is received on or after July 11, 2022, the 60-day election period starts counting after July 10, 2023. The deadline for making the COBRA election is September 8, 2023.
Example 2: COBRA premiums. When a monthly COBRA premium payment is missed, following an initial payment, a 30-day grace period is triggered for making the payment.
- If the missed payment had a due date before July 11, 2022, the 30-day grace period starts counting one year after the original due date. The end of the grace period is one year and 30 days from the missed monthly due date.
- If the missed payment had a due date on or after July 11, 2022, the 30-day grace period starts counting after July 10, 2023. The end of the grace period is August 9, 2023.
Example 3: Special enrollment. When an individual experiences a qualifying event for HIPAA special enrollment, such as the birth of a child or marriage, a notice period of 30 days (or 60 days for loss of coverage under CHIP or Medicaid) is triggered. To exercise the enrollment right, the individual must provide proper notice within the specified time frame.
- For a special enrollment event that occurred before July 11, 2022, the 30-day (or 60-day) period starts counting one year after the triggering event. The deadline for notice is one year and 30 days after the special enrollment event (or one year and 60 days for Medicare or CHIP).
- For a special enrollment event that takes place on or after July 11, 2022, the 30-day period starts counting after July 10, 2023. The deadline for notice is August 9, 2023. Alternatively, for loss of eligibility under Medicaid or CHIP, the deadline is 60 days after July 10, 2023, which is September 8, 2023.
Example 4: Adverse benefit determination Under ERISA, a group health plan is generally required to allow participants at least 180 days after an adverse benefit determination to file an appeal.
- If the adverse benefit determination was made before July 11, 2022, the 180-day appeal period starts counting one year after the date of the adverse benefit determination. The deadline for filing an appeal is one year and 180 days from the adverse benefit determination.
- If the adverse benefit determination was made on or after July 11, 2022, the 180-day appeal period starts counting after July 10, 2023. The deadline for filing an appeal is January 6, 2024.
Example 5: Runout periods for Health FSAs. In this scenario, let’s consider a Healthcare FSA for a calendar year plan with a 90-day runout period that starts on January 1 and ends on March 31.
- For the 2021 plan year, under normal circumstances, the runout period would begin on January 1, 2022 (before July 11, 2022) and conclude on March 31, 2022. However, due to the Outbreak Period, the end of the runout period for the 2021 plan year is one year and 90 days after January 31, 2022, which is March 31, 2023.
- For the 2022 plan year, under regular circumstances, the runout period would start on January 1, 2023 (after July 11, 2022) and end on March 31, 2023. However, considering the Outbreak Period, the 90-day runout period begins after July 10, 2023. The deadline for submitting a Healthcare FSA claim for reimbursement for the 2022 plan year is October 8, 2023.
Extending Time frames Post-Outbreak Period
The conclusion of the Outbreak Period may introduce challenges related to systems and communications. For instance, in Example 5, where the Healthcare FSA runout period for the 2022 plan year ends on October 8, 2023, there could be administrative difficulties due to the misalignment with other standard plan deadlines. To ensure a seamless transition, plan sponsors are advised, by the DOL, to consider extending time frames beyond the requirements of the Outbreak Period. By extending plan deadlines, employers can accommodate participants, employees, and beneficiaries, minimizing the risk of individuals losing their benefits due to non-compliance with these deadlines.
TASC COBRA clients have already received communication on the outbreak Period and the affected timelines.
Note for Healthcare FSA and HRA Clients
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