The Wagner Law Group | Est. 1996

Sophisticated Legal Solutions And Boutique-Style Service

Agencies Issue Guidance Regarding Effect of the End of the COVID-19 Public Health Emergency (PHE) and National Emergency (NE) on Benefits

by | Apr 11, 2023 |

By Barry Salkin, Dannae Delano and Roberta Casper Watson

On January 31, 2020, the Department of Health and Human Services (HHS) declared that a nationwide public health emergency (PHE) had existed since January 27, 2020, because of the pandemic. On March 13, 2020, a COVID-19 National Emergency (NE)was declared by President Trump.  On May 4, 2020, the Department of Labor (DOL), the Department of Treasury (Treasury) and the Internal Revenue Service (IRS) issued a Joint Notice stating that certain time periods under the Internal Revenue Code and ERISA, as well as dates for HIPAA special enrollment, would be disregarded during the NE. The disregarded periods include:

  • The 30- or 60-day period within which to request special enrollment;
  • The 60-day election period for COBRA continuation coverage;
  • The date for making COBRA premium payments;
  • The date for individuals to notify the plan of a qualifying event or determination of disability;
  • The date by which individuals may file a benefit claim under the plan’s claims procedures;
  • The date by which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedures;
  • The date by which claimants may request external review after receipt of a final adverse determination; and
  • The date by which a claimant may request information to perfect a request for external review upon a finding that the request was not completed.

The disregarded periods will end 60 days after the expiration of the NE, a period referred to as the Outbreak Period. See also our client alert, “Administration to End Special Covid Deadlines and Coverage for Welfare Plans and Participants.”  The effect of these disregarded periods is that the deadlines for taking the actions listed above (requesting special enrollment, making a COBRA election, etc.) will not apply until the end of the disregarded period for the actions in question.

In January, President Biden announced his intention to end the PHE and NE on May 11, 2023.  However, the U.S. House of Representatives and Senate passed a joint resolution to end the NE earlier, and President Biden is expected to sign the bill.  The NE end date under the legislation is not entirely clear, but it is possible it could be effective on signature.  Consequently, the NE could end even before the previously announced May 11, 2023, date, but the bill does not change the end of the PHE.

In Frequently Asked Questions (FAQs) issued by HHS, DOL, and Treasury (the “Agencies”) on March 29, 2023, the Agencies stated that, since both the PHE and the NE will end on May 11, 2023, the Outbreak Period will end on July 10, 2023.  However, since the disregarded period cannot exceed one year, a disregarded period will end on the earlier of one year from the date the action would otherwise have been required or permitted, or July 10, 2023.  Therefore, no disregarded period can end after July 10, 2023, although the FAQs noted that further guidance is expected as to the reimposition of regular deadlines, and encouraged employers to continue the extended deadlines until that further guidance is issued.  The Agencies particularly indicated support for employers who wish to keep the same rules in place for the remainder of the current plan year.

In addition to the end of the outbreak period deadline extensions, the FAQs also clarified how COVID-19 coverage and payment requirements under the Family First Coronavirus Act (FFCRA) and the CARES Act will be affected when the PHE ends. Specifically, the Agencies provided that the statutory requirements of the FFCRA requiring plans and issuers to cover COVID-19 diagnostic tests that meet statutory requirements and certain associated tests and services without imposing any cost sharing, prior authorization, or other medical management requirements will cease to apply at the end of the PHE.  Further, if such coverage is provided, plans or issuers may impose cost sharing, prior authorization, or other medical management requirements for such items and services.  Nevertheless, the Agencies “encourage” plans/issuers to continue to provide this coverage without imposing cost sharing or medical management requirements after the PHE ends and to continue to covering benefits for COVID-19 testing and treatment, telehealth and remote care services after the end of the PHE.

With respect to notifying plan participants and enrollees if these changes in coverage under the plan are made, the Agencies encouraged plans and issuers to notify participants, beneficiaries, and enrollees of key information regarding coverage of COVID-19 diagnosis and treatment, including testing.  In addition to encouraging such notification, the Agencies observed that, if the change in terms of coverage would constitute a material modification to the contents of a summary of material modifications, participants and beneficiaries would need to receive notice of the material modification. The FAQs also stated that the advance notification requirements generally applicable to a material modification of a summary of material modifications apply.  The Agencies further noted that certain reimbursement and cash price posting requirements for testing and vaccines under the CARES Act will no longer apply after the end of the PHE.

Regarding the rapid coverage of preventive services and vaccines for coronavirus, after the end of the PHE, non-grandfathered group health plans must continue to cover, without cost sharing, qualifying coronavirus preventive services. The coverage must be provided within 15 business days after the date on which an applicable recommendation is made by the United States Preventive Services Task Force (USPSTF) or the Advisory Committee on Immunization Practices.  Note, however, that a Texas District Court decision holding that the USPSTF does not have the authority, under the U.S. Constitution, to make recommendations that bind plan sponsors calls that part of the FAQ into question. The FAQs do not address the impact of the Texas decision.  In any event, the FAQs note that after the end of the PHE, nothing requires a plan or issuer to provide benefits for qualifying coronavirus preventive services delivered by an out-of-network provider if the plan or issuer has a network of providers. Additionally, nothing precludes a plan or issuer that has a network of providers from imposing cost sharing for qualifying coronavirus preventive services delivered by an out-of-network provider. However, if a plan or issuer does not have a provider in its network who can offer a qualifying coronavirus preventive service, and if the preventive requirement remains in effect, the plan or issuer must cover the item or service when furnished by an out-of-network provider, and may not impose cost sharing with respect to the item or service.

The FAQs also addressed special enrollment periods for individuals losing coverage under Medicaid or the Children’s Health Insurance Program (CHIP). The Agencies indicated that, from the onset of the PHE, state Medicaid agencies generally have not terminated the enrollment of Medicaid beneficiaries who were enrolled on or after March 18, 2020, and through March 31, 2023 (the continuous enrollment condition). After March 31, 2023, certain individuals who had previously qualified for Medicaid or CHIP coverage will cease to be eligible. According to the Agencies, individuals who lose Medicaid or CHIP coverage from March 31, 2023, through July 10, 2023, are eligible for relief and can request special enrollment in a group health plan until 60 days after July 10, 2023. The Agencies noted that neither ERISA nor the Code prohibits extension of this period beyond the 60-day statutory minimum. The Agencies also identified actions that employers might take, although not legally required to do so, to assist employees who have been benefiting from Medicaid or CHIP to maintain their health coverage.

Finally, the Agencies indicated that an individual covered by a high deductible health plan (HDHP) that is providing medical care services and items purchased for testing for and treatment of COVID-19 may continue to contribute to a health savings account (HSA) until further guidance is issued. Future guidance will not generally require HDHPs to make changes in the middle of a plan year for covered individuals to remain eligible to participate in an HSA.

The end of the PHE, whether it occurs on May 11, 2023 or earlier, will require various actions and decisions by plan sponsors and plan administrators, including plan amendments; issuing of summaries of material modifications and an updated summary of benefits and coverage; other forms of notice to plan participants and COBRA enrollees of the end of the extended deadlines; and coordination with third party administrators and service providers with respect to any delinquent claims, COBRA election and payment deadlines, and any external appeals.