On March 29, 2023, the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury (collectively, the Departments) released FAQ guidance clarifying the requirements for group health plans and insurers to wind down and transition from both the COVID-19 Public Health Emergency (PHE) and COVID-19 National Emergency (NE) declarations.
This FAQ guidance comes on the heels of the January 30, 2023 announcement by the White House Office of Management and Budget to extend both the COVID-19 PHE and NE declarations until May 11, 2023, and then terminate both declarations on that date. Click here for a prior Risk Strategies article detailing the impacts the PHE and NE termination will have on employers sponsoring group health plans.
This article will focus on this recent FAQ clarifying guidance to assist group health plans in their PHE and NE wind down and transition efforts. Read on for more information.
COVID-19 Public Health Emergency
The most recent extension of the COVID-19 PHE occurred on January 11, 2023, and was scheduled to expire on April 11, 2023.[1] It is now scheduled to expire on May 11, 2023 in accordance with the January 30, 2023 announcement.
These recent FAQs provide clarifying guidance for group health plans as they continue to work with their insurance carriers and third-party administrators (TPAs) to wind down and transition from the following specific PHE benefit plan flexibilities and enhancements:
- COVID-19 Tests and Treatment: Group health plans will not be required to cover COVID-19 tests (including over-the-counter tests), as well as related treatment services and visits, without participant cost-sharing, prior authorization, or other medical management techniques. As a reminder, group health plans have been required since January 15, 2022 to cover over-the-counter COVID tests at no cost to covered individuals. Once the COVID-19 PHE ends, group health plans may, but are not required to, provide this first dollar coverage for COVID tests and related treatment.
Related FAQ Guidance: The FAQs encourage group health plans to continue to provide coverage of COVID-19 tests without participant cost-sharing or medical management requirements after the PHE ends. Moreover, when a test involves multiple items or services, group health plans should rely on the earliest date that an item or service is provided within an episode of care to determine the date that a COVID-19 diagnostic test is rendered.
Example: If a health care provider collects a specimen to perform a COVID-19 diagnostic test on the last day of the PHE (May 11, 2023) but the lab analysis occurs on a later date, the plan should treat both the specimen collection and subsequent lab analysis as if they were both performed during the PHE, and may not impose cost-sharing on the plan participant.
- COVID-19 Vaccines: Group health plans will still be required to cover COVID-19 vaccines, including booster shots, without participant cost-sharing, but can limit this coverage to only in-network providers. During the COVID-19 PHE, group health plans must cover COVID-19 vaccines and booster shots, provided by both in-network and out-of-network providers, as a covered preventive service.
Related FAQ Guidance: If a group health plan does not have a provider in its network who can provide a COVID-19 vaccine, the plan must cover the vaccine, even if provided by an out-of-network provider, and may not impose participant cost-sharing.
- Plan Changes Notification: In the FAQ guidance, the Departments encourage group health plans (and insurers) to notify plan participants of plan coverage changes for COVID-19 diagnostic testing and treatment. The guidance also reiterates the 60-day advance notice requirement for material modifications to a plan or coverage terms impacting a summary of benefits and coverage (SBC).
Related FAQ Guidance: A group health plan that made changes to increase benefits, reduce/eliminate cost-sharing for COVID-19 diagnosis and treatment, or for telehealth/remote care services and decides to revoke these changes when the PHE expires in May is not required to provide advance notice of these material modifications as long as the plan (or insurer):
- Previously notified the plan participants of the general duration of the additional benefits coverage or reduced cost-sharing to last until the end of the PHE, or:
- Notifies plan participants 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.
A notice from a prior plan year will not satisfy the plan’s obligation to provide advance notice for coverage in the current plan year.
COVID-19 National Emergency
The COVID-19 National Emergency (NE), first declared on March 1, 2020 and extended again on February 24, 2021 and on February 18, 2022, provides extensions to various group health plan-related deadlines, including certain COBRA-related deadlines. Click here for a prior Risk Strategies article highlighting these deadlines.
The NE deadline extensions generally last for one year or 60 days from the announced end of the National Emergency (the “Outbreak Period”), if earlier.
As a reminder, below is a list of the COBRA-related and plan-related periods that will revert back to their standard statutory/regulatory deadlines once the COVID-19 NE and Outbreak Period ends:
- COBRA Election Notice – standard 14-day deadline (or 44 days if the employer is the plan administrator) for plan administrators to distribute a COBRA election notice to qualified beneficiaries.
- COBRA Election Period – standard 60-day deadline for qualified COBRA beneficiaries to elect COBRA coverage.
- COBRA Premium Payments – standard 45-day (for the initial payment) and 30-day (for subsequent payments) deadlines for qualified COBRA beneficiaries to pay COBRA premiums in a timely manner.
- COBRA Qualifying Event – standard 60-day deadline in which qualified COBRA beneficiaries must notify the plan of certain qualifying events, such as divorce or legal separation or a dependent child ceasing to be a dependent under the terms of the plan.
- COBRA Disability Extension Notices – standard 60-day deadline in which qualified COBRA beneficiaries must notify the plan of a disability determination.
- HIPAA Special Enrollment Period – standard 30-day or 60-day period to submit a HIPAA special enrollment request.
- Claims and Appeals Deadlines – standard deadlines to file a claim, an appeal of an adverse benefit determination, or a request for an external review of a claim.
The FAQs confirm that the Outbreak Period will end on July 10, 2023 (60 days after May 11, 2023, the end date of the NE) and provide several helpful examples to illustrate relevant timeframes, outlined below.
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Example #1: Electing COBRA
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Example Facts:
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Employee experiences a COBRA qualifying event and loses coverage on April 1, 2023. Employee is eligible to elect COBRA coverage under their employer’s plan and was provided a COBRA election notice on May 1, 2023.
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Example Question:
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What is the deadline for this employee to elect COBRA?
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Example Conclusion:
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The last day of this employee’s COBRA election period is 60 days after July 10, 2023, the end of the Outbreak Period — September 8, 2023
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Example #2: Electing COBRA
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Example Facts:
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Employee experiences a COBRA qualifying event and loses coverage on May 12, 2023. Employee is eligible to elect COBRA coverage under their employer’s plan and was provided a COBRA election notice on May 15, 2023.
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Example Question:
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What is the deadline for this employee to elect COBRA?
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Example Conclusion:
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Since the qualifying event occurred on May 12, 2023, after the end of the NE but still during the Outbreak Period, the extension still applies. The last day of this employee’s COBRA election period is 60 days after July 10, 2023, the end of the Outbreak Period — September 8, 2023
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Example #3: Electing COBRA
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Example Facts:
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Employee experiences a COBRA qualifying event and loses coverage on July 12, 2023. Employee is eligible to elect COBRA coverage under their employer’s plan and was provided a COBRA election notice on July 15, 2023.
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Example Question:
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What is the deadline for this employee to elect COBRA?
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Example Conclusion:
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Since the qualifying event occurred on July 12, 2023, after the end of the NE and the Outbreak Period, the extension does not apply. The last day of this employee’s COBRA election period is 60 days after July 15, 2023 — September 13, 2023
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Example #4: Paying COBRA Premiums
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Example Facts:
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Employee experiences a COBRA qualifying event and receives a COBRA election notice on October 1, 2022. Employee elects COBRA coverage on October 15, 2022, retroactive to October 1, 2022.
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Example Question:
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When must this employee make the initial COBRA premium payment and subsequent monthly COBRA premium payments?
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Example Conclusion:
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Employee has until 45 days after July 10, 2023 (the end of the Outbreak Period), which is August 24, 2023, to make the initial COBRA premium payment. The initial COBRA premium payment would include the monthly premium payments for October 2022 through July 2023. The premium payment for August 2023 must be paid by August 30, 2023 (the last day of the 30-day grace period for the August 2023 premium payment). Subsequent monthly COBRA premium payments would be due the first of each month, subject to a 30-day grace period.
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Example #5: HIPAA Special Enrollment Period
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Example Facts:
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Employee previously declined to enroll in employer’s group health plan and gave birth on April 1, 2023.
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Example Question:
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When may this employee exercise her HIPAA special enrollment right to enroll herself and her child in the employer’s plan?
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Example Conclusion:
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Employee and her child qualify for a HIPAA special enrollment period in the employer’s plan as of April 1, 2023 (child’s birth). Employee may exercise her HIPAA special enrollment rights for herself and her child until 30 days after July 10, 2023 (the end of the Outbreak Period) — August 9, 2023[2]
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Example #6: HIPAA Special Enrollment Period
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Example Facts:
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Employee previously declined to enroll in employer’s group health plan and gave birth on May 12, 2023.
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Example Question:
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When may this employee exercise her HIPAA special enrollment right to enroll herself and her child in the employer’s plan?
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Example Conclusion:
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Employee and her child qualify for a HIPAA special enrollment period in the employer’s plan as of May 12, 2023 (child’s birth), after the end of the COVID-19 NE but during the Outbreak Period. Employee may exercise her HIPAA special enrollment rights for herself and her child until 30 days after July 10, 2023 (the end of the Outbreak Period) — August 9, 2023[3]
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Example #7: HIPAA Special Enrollment Period
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Example Facts:
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Employee previously declined to enroll in employer’s group health plan and gave birth on July 12, 2023.
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Example Question:
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When may the employee exercise her HIPAA special enrollment right to enroll herself and her child in the employer’s plan?
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Example Conclusion:
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Employee and her child qualify for a HIPAA special enrollment period in the employer’s plan as of July 12, 2023 (child’s birth), after the end of both the COVID-19 NE and the Outbreak Period. Employee may exercise her HIPAA special enrollment rights for herself and her child until 30 days after July 12, 2023 — August 11, 2023[4]
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In the FAQ guidance, the Departments encourage (but do not require) group health plans (and insurers) to allow longer deadline timeframes than the minimum statutory requirements for plan participants to complete certain COBRA-related and/or other plan-related actions.
HIPAA Special Enrollment Right for Loss of Medicaid and CHIP Coverage
The Families First Coronavirus Response Act, passed in 2020, increased federal Medicaid and Children’s Health Insurance Program (CHIP) funding for states during the PHE and prohibited states from disenrolling Medicaid and CHIP recipients to ensure continuous health coverage. The Consolidated Appropriations Act of 2023, passed in late 2022, permits states to restart the Medicaid/CHIP eligibility determination process and resume terminating Medicaid and CHIP coverage on April 1, 2023.
Employees and their dependents who lose Medicaid or CHIP coverage are entitled to a HIPAA special enrollment period (SEP) to enroll in a group health plan as long as they provide notice within 60 days of losing Medicaid or CHIP coverage. The FAQs confirm that this SEP timeframe for those individuals who lose Medicaid or CHIP coverage will run until September 8, 2023 (60 days after the end of the Outbreak Period).
In the FAQ guidance, the Departments encourage (but do not require) group health plans (and insurers) to permit longer deadline timeframes than the standard 60-day SEP requirement for individuals who lose Medicaid or CHIP coverage to enroll in a group health plan.
Additionally, the Departments posted a flyer with helpful information to share with individuals who may lose their Medicaid or CHIP coverage after March 31, 2023.
HDHP/HSA Eligibility & COVID Testing/Treatment
Finally, the FAQ guidance confirms that high-deductible health plans (HDHPs) may continue to cover COVID-19 tests and treatment on a first-dollar basis, or prior to satisfaction of the deductible, without jeopardizing the plan's status as an HDHP or an individual’s ability to make or receive Health Savings Account (HSA) contributions.[5]
Next Steps for Employers
This FAQs guidance provides helpful clarifications on several topics relating to the COVID-19 PHE and NE wind down and termination.
Employers are advised to continue working with their insurance carriers, TPAs, and/or pharmacy benefit managers as well as their COBRA vendors to begin preparations for winding down these temporary plan changes and deadline extensions.
These preparations should include the following measures:
- Revisit group health plan design in connection with COVID-19 diagnostic testing and treatment and decide which temporary plan enhancements, if any, to maintain without participant cost-sharing.
- Provide clear and thorough communications to employees on what plan changes to expect going forward.
- Determine whether any plan amendments are required once the PHE and NE ends, particularly if plans permit either:
- additional time for plan participants to complete certain COBRA-related and/or other plan-related actions.
- additional time for individuals to exercise their HIPAA special enrollment period rights upon losing Medicaid or CHIP coverage.
- Review and update summary plan descriptions and COBRA notices, as necessary.
- Ensure COBRA enrollment and payment tracking systems are up-to-date.
Contact your Risk Strategies representative for assistance or contact us directly at benefits@risk-strategies.com.
[1] This was the 12th renewal of the COVID-19 PHE determination, initially declared by the HHS Secretary on January 31, 2020. Since HHS previously confirmed they will provide a 60-day notice before any possible termination of the PHE determination, the January 30, 2023 wind down/termination announcement arrived before the February 11, 2023 deadline (60 days before April 11, 2023) and extends the COVID-19 PHE for an additional month until May 11, 2023.
[2] Provided employee pays the premiums for the period of coverage after the birth.
[3] Provided employee pays the premiums for the period of coverage after the birth.
[4] Provided employee pays the premiums for the period of coverage after the birth.
[5] In accordance with IRS Notice 2020-15.
