March 31, 2022
We summarize below the regulatory deadlines that were extended during the pandemic for employer group health plans and discuss the potential timing and implications of the unwinding of relief provided by the COVID-19 National Emergency and Public Health Emergency.
On March 13, 2020, former President Trump declared that the COVID-19 outbreak constituted a National Emergency that begun on March 1, 2020. As established by the National Emergencies Act, the declaration of a National Emergency may last for up to one year, although it may be modified, shortened or extended. President Biden initially renewed the National Emergency for one-year on February 24, 2021, before renewing again on February 18, 2022 for an additional one-year duration. The National Emergency may be terminated sooner, but as of now it will end automatically on February 25, 2023 unless it is renewed again by the President.
In contrast to the National Emergency, the Secretary of the Department of Human Services (HHS) has the authority to determine when a Public Health Emergency (PHE) exists. A PHE may be extended indefinitely in 90-day intervals, which may be modified, shortened or extended. The COVID-19 PHE was first declared on January 31, 2020 and has been continuously renewed for 90-day durations, most recently on January 14, 2022. Although the current PHE extension is slated to expire in mid-April 2022, President Biden has indicated that the Administration would provide 60-days advance notice prior to the expiration. The 60-day window has currently passed, suggesting the Administration is likely to extend the PHE.
Related Guidance and Coverages Impacted
At the onset of the COVID-19 National Emergency and PHE, two sets of initial guidance were issued by the Department of Labor/Employee Benefit Security Administration (DOL/EBSA), HHS, and Department of the Treasury/Internal Revenue Service (IRS) regarding employer-sponsored group health plans:
- Notice 2020-01. Citing authority under either a National Emergency or a PHE, Notice 2020-01 provided employer plan sponsors with extensions to furnish plan notices and disclosures.
- Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak (“Joint Notice”). Citing the National Emergency for authority, the Joint Notice published in the Federal Register established the “Outbreak Period” that lasts until 60 days after the announced end of the National Emergency or such other date announced by the Departments in a future notification. During the Outbreak Period, group health plans, plan participants and beneficiaries were given extensions and flexibility related to HIPAA special enrollments, COBRA elections and payments, claims and appeals procedures, and external review processes.
The relief provided by this guidance was initially believed to be for a one-year period that would expire in February 2021. Shortly before the expiration, the Departments issued new clarifying guidance:
- EBSA Disaster Relief Notice 2021-01. Notice 2021-01 clarified that the relief from Notice 2020-01 and the Joint Notice are not provided for a single period of time, but rather are applicable on an individual basis. It additionally extends the relief until the earlier of (a) one year from the date they were first eligible for relief, or (b) 60 days after the announced end of the National Emergency (i.e., the end of the Outbreak Period).
The Families First Coronavirus Relief Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established COVID-19 vaccines and testing coverage requirements for employer-sponsored health plans:
- FFCRA. The FFCRA generally requires plans to provide benefits for certain items and services related to diagnostic COVID-19. Plans and issuers must provide this coverage without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance) or prior authorization or other medical management requirements. However, this coverage must only be provided during the PHE.
- CARES Act. The CARES Act amended the FFCRA to include coverage for a broader range of diagnostic items and services.
Neither the FFCRA nor the Cares Act require employer-sponsored group health plans to cover the cost of COVID-19 treatment at no cost-sharing like they require for diagnostic testing and related services. Plans may subject these services to existing cost-sharing requirements.
What to Watch for – Indicators and Implications on Timing
Employers should monitor statements from the White House and/or HHS, as the Administration previously indicated they would provide advanced notice prior to declaring the end of the PHE. While some advocates are pushing the Administration to provide 90-days advanced notice, a 60-day warning is most likely.
Two indicators unrelated to employer group health plans may also signal the Administration’s timeline for unwinding the National:
- Medicaid impacts. The FFCRA required states to provide continuous enrollment to Medicaid enrollees in exchange for increased federal Medicaid funding. During this time, states generally could not disenroll people from Medicaid. This flexibility was only extended for the duration of the PHE, however, putting several million people at risk of losing Medicaid coverage upon its close. Consumer groups and other stakeholders are advocating that Congress and the Biden Administration make this Medicaid expansion permanent, or for a glidepath to be offered allowing these Medicaid participants to wind-down their coverage. With the 2022 mid-term elections occurring in November, a legislative solution may be pursued to avoid the political ramifications of millions of Americans losing coverage prior to the election.
- Loss of telehealth coverage under Medicare. HHS loosened restrictions on telehealth coverage under Medicare during the PHE which would expire at its close. The Consolidated Appropriations Act, 2022 government funding bill enacted on March 15, 2022 included an extension of this telehealth flexibility under Medicare for 151 days following the close of the PHE. This extension could signify the Administration’s desired timing to unwind the PHE on August 2, 2022: plotted backward from the end of the year, this 151-day period would run from August 3 through December 31, 2022.
Legislative action to extend or modify some of the employer-related relief also remains a possibility. Democrats in the House of Representatives have currently introduced a bill, the No Surprises for COVID-19 Tests Act, that would extend the requirement for employer plans to cover COVID-19 diagnostic testing through December 31, 2023. As a trade-off for the extended mandated coverage, the bill attempts to address potential price gouging by subject any in-person out-of-network COVID-test to the No Surprises Act, treating these tests like an emergency service subject to the independent dispute resolution (IDR) requirements). It would not apply to over the counter (OTC) COVID-19 tests. Other legislation may subsequently be introduced.
Next Steps for Employers
The Business Group is advocating for the Departments to provide some flexibilities to help employers prepare for an orderly wind-down of the regulatory relief provided by the National Emergency and PHE. As we await this guidance, we encourage employers to consider planning for:
- Notice requirements on expiration timing. Guidance may require plan sponsors to issue notices to participants and beneficiaries providing advanced notice of the closing dates for the National Emergency and/or PHE. The Business Group is advocating for employer flexibility in how to provide these notices (e.g., postcards, written notices, electronic notices).
- Notice requirements on expiration of coverages. Guidance may require plan sponsors to issue notices to participants and beneficiaries informing them of the expiration of relief and coverages (e.g., COBRA extensions; COVID-19 testing coverage requirements). The Business Group is advocating for employer flexibility in how to provide these notices (e.g., postcards, written notices, electronic notices).
- Final elections or other activity. Plan sponsors may want to prepare for a period of time where participants and beneficiaries take advantage of relief (e.g., retroactive COBRA coverage) upon being notified of the closing of the PHE.
- Determine whether to voluntary maintain certain timeframes and/or coverages. Subject to guidance that is issued, plan sponsors may also want to consider making permanent provisions that were previously required during the PHE (e.g., COVID-19 testing and vaccination coverage). Employers must also account for other applicable regulations when making these decisions, such as health savings account (HSA) and high-deductible health plan (HDHP) rules.
A detailed discussion of the timeline considerations for unwinding the COVID-19 National Emergency and PHE and the associated implications for employer plan sponsors is available in our March 2022 webinar.
- Renewal of COVID-19 National Emergency, February 2022
- Renewal of COVID-19 Public Health Emergency, January 2022
- EBSA Disaster Relief Notice 2021-01
- EBSA Disaster Relief Notice 2020-01
- Joint Departments Notice in the Federal Register
- Business Group on Health Webinar: Regulatory & Compliance Update, March 2022
If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.
We provide this material for informational purposes only; it is not a substitute for legal advice.