On January 30, 2023 the Biden Administration announced that the COVID-19 Public Health Emergency (PHE) and COVID-19 National Emergency Declaration (collectively, the “emergency periods”) will end on May 11, 2023. In light of the COVID-19 pandemic, benefit plans were required to comply with a number of new, temporary obligations. Those compliance obligations will come to an end as the emergency periods expire. This LEGALcurrent focuses on the impact on group health plans.
As of this publication, Congress has adopted a joint resolution that, if signed by the President, would end the COVID-19 National Emergency Declaration upon the date signed by the President. President Biden has indicated that he intends to sign the joint resolution, and so the COVID-19 National Emergency may end sooner than May 11, 2023. The PHE Emergency, however, is not covered by the joint resolution and so is still expected to end on May 11, 2023.
Public Health Emergency
When the PHE ends on May 11, 2023, group health plans will no longer be required to cover the following without cost-sharing, prior authorization, or other medical management techniques: (i)over-the-counter (OTC) COVID-19 tests; (ii)provider ordered PCR COVID-19 tests and related services for diagnostic purposes; (iii)provider ordered PCR COVID-19 tests required before surgery or a medical procedure; or (iv)out-of-network COVID-19 vaccines.
However, employers with self-insured plans should consider whether to voluntarily continue coverage of any of the above without cost-sharing or other requirements.* When making that decision, employers should consider the cost impact and the administrative capabilities of their claims administrators. Additionally, they should be mindful that continuing coverage without cost-sharing may cause parity problems under the Mental Health Parity and Addiction Equity Act (MHPAEA), as covering a medical/surgical benefit (other than preventive care) without cost-sharing could lead a plan to run afoul of the complicated quantitative treatment limitation rules under the MHPAEA. Enforcement under the MHPAEA related to coverage of COVID-19 testing and related services was suspended during the PHE, but it will begin again when the PHE expires.
Depending on an employer’s decision with respect to the ongoing coverage of any of those items or services, it may need to amend its plan document and/or summary plan description (SPD). Further, regardless of its decision to continue coverage, an employer should review its SPDs and previous communications to participants, such as the Summary of Benefits and Coverage (SBC). Updated SPDs or communications may be necessary, or advisable, to ensure participants have accurate information on their coverage following the end of the PHE.**
National Emergency Declaration and Outbreak Period
In April 2020, the Department of Labor and Department of the Treasury (collectively, the “agencies”) issued guidance extending certain deadlines for ERISA-covered plans and participants in those plans in light of the COVID-19 pandemic. Subsequently, the agencies released follow-up guidance on the deadline extensions in February 2021 as explained in our April 2020 and February 2021 LEGALcurrents. This guidance affected the deadlines for:
- Election of COBRA continuation coverage;
- Payment of COBRA premiums;
- Plan administrators to provide COBRA election notices to qualified beneficiaries;
- Participants to request HIPAA special enrollments; and
- The filing of benefit claims/appeals or requesting an external review of an adverse benefits determination.
Under the guidance, plans must “toll” the specified deadlines until the earlier of: (a) one year from the date the individual was first eligible for relief for purposes of that deadline, or (b) 60 days after the end of the COVID-19 National Emergency Declaration (the “Outbreak Period”). In other words, plans must disregard the days that fall within that period of time when calculating the specified deadlines. The clock begins to run again on the first day after the disregarded period ends. No deadline may be tolled beyond one year. The deadline extension must be applied on an individual-by-individual basis.
The Outbreak Period, and consequently these tolling provisions, began March 1, 2020. The Outbreak Period will continue for 60 days after the end of the COVID-19 National Emergency Declaration. As of the date of this publication, the National Emergency Declaration is set to end on May 11, 2023. If it does end on that date, the last day of the Outbreak Period will be July 10, 2023. This would mean that beginning on July 11, 2023 each day counts when calculating the applicable deadline for an individual. However, as indicated earlier, it is possible that the National Emergency Declaration will end sooner than May 11, 2023, depending on whether President Biden signs the joint resolution adopted by Congress. The discussion (and examples) set forth below assume a May 11, 2023 end date of the National Emergency Declaration. It’s important to note that the end of the Outbreak Period signals the end of deadline tolling. Just because a deadline was affected by the guidance does not mean July 10, 2023 is the new deadline to take action. Given the complexity of the deadline extensions, the impact of the Outbreak Period ending on July 10, 2023 is best illustrated through examples. These examples generally focus on the impact of the end of the Outbreak Period on COBRA election periods, but as noted above, the guidance affects other deadlines as well. Additionally, to simplify the illustration of the rules, these examples assume that coverage ends on the date the employee terminated employment and that the employee received a COBRA election notice on the date of termination of employment.
Example 1: Employee terminated employment June 2, 2022, which under normal COBRA rules would have triggered a 60-day COBRA election period ending on August 1, 2022. However, the one-year period from June 2, 2022 until June 1, 2023 is “tolled”, so the former employee has 60 days from June 1, 2023, or until July 31, 2023, to elect COBRA continuation coverage.
Example 2: Employee terminated employment June 2, 2023, which under normal COBRA rules would have triggered a 60-day COBRA election period ending on August 1, 2023. That individual’s 60-day COBRA election period would begin to run again on July 11, 2023 and the individual’s deadline to elect COBRA continuation coverage would be due no later than September 8, 2023.
Example 3: The deadline for an individual to submit a Health Flexible Spending Account (FSA) claim under Employer’s plan is the March 31 that follows the plan year in which the claim was incurred. Employee incurs a claim on October 1, 2022. Under the plan’s normal claims procedures, Employee must submit their FSA claim by March 31, 2023. Under applicable guidance, it is unclear how tolling works in the context of a “static” claims submission deadline as set forth in this example (the March 31 following the plan year in which the claim was incurred). We believe a plausible (and the most reasonable) interpretation of the guidance which may be supported by the agencies is that the claims submission deadline is 90 days after the end of the Outbreak Period, making the deadline October 8, 2023. This is because under normal circumstances a person would have 90 days after the end of the plan year to submit a claim (i.e., until March 31), and so it is reasonable to give the participants 90 days after the end of the Outbreak Period to submit claims.
There is no express requirement for a plan fiduciary to notify affected individuals that the Outbreak Period is ending. However, it may be advisable to send such a notice to inform affected individuals that the deadline extension is ending. This notice could take the form of a summary of material modifications or generic communication explaining the implications of the end of the Outbreak Period. Another (more administratively cumbersome) approach would be to provide individualized notices to each person who is affected by the Outbreak Period deadline tolling explaining how it affects their situation. Even if a plan fiduciary wanted to take the time to do a targeted approach, it may nevertheless make sense to also do a generic communication, since a plan fiduciary would have no way of knowing every scenario in which a plan participant could utilize the Outbreak Period deadline extensions (e.g., a plan fiduciary may not be aware that a participant had a HIPAA special enrollment event, such as getting married).
Further, if a plan uses third party service providers, the plan sponsors should contact those service providers (e.g., COBRA administrators, third party administrators, enrollment administrators) to ask if those service providers are planning outreach to individuals whose deadlines are affected by the Outbreak Period tolling.
With the Outbreak Period ending in July (or sooner!), employers have a few months to determine their next steps. In the meantime, if you have any questions regarding the end of the Outbreak Period, please contact any member of the Employee Benefits and Executive Compensation group.
*Insurance carriers, who are regulated by state law, are responsible for the benefit design of their insured products, so a a plan sponsor of a fully-insured plan may not be given a design option.
**In FAQ guidance issued by the Departments of Labor, Health and Human Services, and Treasury (the “Departments”), the Departments noted that they “encourage plans” to notify participants if the plan terms regarding coverage for the diagnosis or treatment of COVID-19 change in light of the end of the PHE. The Departments reminded plans that if they make a material modification to plan terms that change the content of the most recently provided SBC, the plan must notify participants within a “reasonable timeframe” in advance of the change. (Normally, a plan must notify participants within at least 60-days prior to mid-plan year material modification that impacts the SBC, but the Departments provided relief from this 60-day time frame in that they will only require notice within a “reasonable timeframe.)