Impact on Employer-Sponsored Health Plan
On January 30, 2023, the Biden Administration issued a policy statement indicating its intention to end the COVID-19 national emergency (“NE”) and public health emergency (“PHE”) declarations effective as of May 11, 2023. The end of the NE and PHE declarations has significant implications for employer-sponsored health plans. During the pandemic, federal regulators issued guidance suspending certain health plan deadlines for up to 12 months during the “Outbreak Period.” The Outbreak Period began on March 1, 2020 and will end 60 days after the end of the NE period.
Accordingly, with the NE period now set to expire on May 11, 2023, the Outbreak Period will end 60 days thereafter, on July 10, 2023. Of particular note to health plan sponsors, the following Outbreak Period extensions are now set to expire as of July 10:
COBRA
All COBRA timelines will return to pre-Outbreak Period deadlines, including the following:
- The 60-day period for electing COBRA continuation coverage following receipt of an election notice;
- The 45-day period for making initial COBRA premium payments; and
- The 30-day grace period for making subsequent monthly COBRA premium payments.
Employers will need to ensure their COBRA programs return to pre-pandemic election and notice deadlines. Employers should contact their COBRA administrators to confirm that they have an implementation plan in place for the end of the Outbreak Period.
HIPAA Special Enrollment
Plan administrators will no longer have to permit enrollment of new spouses or dependents if the notice of certain life events, such as birth, adoption, placement for adoption, loss of other coverage, etc., is received beyond the applicable 30-day timeframe. For example, a spouse of an employee has 30 days to enroll in the employee’s group health plan upon the spouse’s loss coverage under another plan. Some guidance indicates that plans can expect an influx of mid-year HIPAA special enrollment applications due to the loss of Medicaid coverage as a result of the recent legislative permission for states to begin eligibility redeterminations as of this month.
Claims Submission and Appeal
The deadlines for filing claims under a plan’s claims procedures and requesting internal and external appeals for adverse benefit determinations will be reinstated to the pre-Outbreak Period timeframes. Employers should ensure their claims administrators follow plan terms and remove any time extensions applicable to claims and appeals adopted due to the Outbreak Period rules.
COVID-19 Testing and Vaccines
As for COVID-19 health-related implications, the expiration of the PHE period ends the requirement for plans to offer cost-free COVID-19 testing. Thus, plans may impose cost sharing on COVID-19 tests similar to other tests, such as flu tests. Plans may nevertheless choose to offer no-cost or low-cost COVID-19 testing, with the caveat that federal subsidies will be decreased or will no longer be available. On the other hand, non-grandfathered plans must continue to offer cost-free coronavirus-related preventative care (e.g., vaccines) under the ACA.
Until July 10, 2023, employers must continue to administer their group health plans in accordance with the Outbreak Period extension and COVID-19 testing coverage rules. However, employers should be prepared for the expiration of those rules and the return to pre-pandemic deadlines and coverage requirements. If employers amended their notices and/or plan documents to include the Outbreak Period extension language, employers may need to amend those documents back to their original forms. Additionally, if employers make changes to the benefits offered under their plans in conjunction with the NE and PHE expirations, employers must notify plan participants of material changes, and, notably, if a change affects information in the SBC, the notice must come 60 days prior to implementing the change.
This compliance alert has been prepared by the attorneys at Maynard, Cooper and Gayle. This blog and its contents are not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.