The Biden Administration recently announced that it intends to end the COVID-19 emergency declarations that have been in effect since 2020, effective at the end of the day on May 11, 2023. The termination of the emergency declarations has several implications for health and retirement plans, which have experienced both increased obligations and increased flexibility while they have been in effect.

On March 29, 2023, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (jointly, the Departments) issued Frequently Asked Questions (FAQs) regarding the impact of the end of the COVID-19 emergency declarations on certain requirements under the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and other Department guidance.

In light of this new guidance and the anticipated termination of the emergency declarations on May 11, 2023, plan sponsors should review their plan documents and prior employee communications to determine what changes and notifications may be required in connection with the end of the emergency declarations next month.

Background

On January 31, 2020, former HHS Secretary Alex M. Azar II declared that a nationwide public health emergency existed under section 319 of the Public Health Service Act in relation to the COVID-19 pandemic, effective January 27, 2020 (PHE). The PHE has been continually renewed, most recently by HHS Secretary Xavier Becerra, effective February 11, 2023.

On March 13, 2020, former President Trump declared a national emergency under section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, effective March 1, 2020 (National Emergency). The National Emergency has been continually renewed by President Biden, most recently on February 10, 2023.

The FFCRA and CARES Act impose certain coverage requirements on group health plans for the duration of the PHE. In addition, the Internal Revenue Service (IRS) and DOL issued guidance on deadline extensions that apply to health and retirement plans for the duration of the National Emergency. With the anticipated end of the PHE and National Emergency next month, many of these additional benefits and protections will no longer be required.

Implications for Group Health Plans

The termination of the PHE will have the following impact on group health plans:

Coverage of COVID-19 diagnostic testing no longer required. As discussed in more detail in our prior alert, the FFCRA mandated that health plans cover without cost-sharing (including deductibles, copayments, and coinsurance) items and services related to COVID-19 diagnostic testing. The CARES Act expanded the requirements for mandatory coverage, and subsequent Department guidance extended this requirement to over-the-counter (OTC) COVID-19 diagnostic tests. After the PHE ends, this requirement no longer applies. Any plan that provides coverage for COVID-19 diagnostic testing after the PHE ends, including OTC COVID-19 diagnostic tests purchased after the PHE ends, may impose cost-sharing requirements, prior authorization, or other medical management requirements for those items or services.

The FAQs clarify that if a plan chooses to impose requirements on (or discontinue coverage for) COVID-19 diagnostic testing items and services after the PHE, the plan should consider the date that an item or service is furnished or rendered to an individual, and not the date the claim is submitted. For example, if a health care provider collects a specimen to perform a COVID-19 diagnostic test on the last day of the PHE, but the laboratory analysis occurs on a later date, the plan should treat both the specimen collection and laboratory analysis as if they were furnished during the PHE and are, therefore, covered in full by the plan.

Coverage of COVID-19 preventive services (including vaccines) is still required.

The CARES Act requires non-grandfathered plans to cover without cost-sharing any qualifying coronavirus preventive service 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 (ACIP). The Departments issued regulations under this provision that imposed additional requirements, including that the mandatory first-dollar coverage apply to both in-network and out-of-network services.

The statutory requirement to provide coverage of COVID-19 preventive services is not limited to the duration of the PHE and will continue in effect for non-grandfathered plans. However, the regulatory requirements contain a sunset provision and no longer apply after the end of the PHE. Accordingly, a non-grandfathered plan must continue to provide first-dollar coverage of COVID-19 vaccines and other preventive services after the end of the PHE. However, similar to other preventive services, COVID-19 preventive services can be limited to in-network providers, unless the plan does not have an in-network provider that can provide a required service.

Preventive service coverage mandate limited by Federal District Court ruling. Unrelated to the end of the PHE, a federal district court in Texas has blocked enforcement of certain portions of the preventive service coverage mandate under the Affordable Care Act. The ruling, issued March 30, 2023, impacts the preventive services that are recommended by USPSTF, a body that is not constitutionally appointed. The ruling does not impact vaccines recommended by ACIP (which is subject to HHS oversight), so it has no impact on the requirement to cover COVID-19 vaccines that are recommended by that body. We expect the district court's decision to be appealed by the Biden Administration and will continue to monitor this case for its impact on preventive service coverage generally.

First-dollar coverage of COVID-19 testing and treatment is still permitted under high deductible health plans.

Under general rules applicable to high deductible health plans (HDHPs) and eligibility for health savings accounts (HSA), a HDHP may not pay for items and services, other than preventive coverage, until the participant has met the minimum statutory deductible for HDHPs. In March 2020, the Treasury Department and the IRS issued Notice 2020-15, which permits a HDHP to provide first-dollar coverage for COVID-19 testing and treatment without causing a participant to be ineligible to contribute to an HSA. Although Notice 2020-15 was issued due to the PHE, it applies until further guidance. The FAQs confirm that the relief under Notice 2020-15 will continue to apply after the end of the PHE and until further guidance is issued. Any future modifications to the guidance will not apply to require changes to HDHP coverage in the middle of a plan year in order for a covered individual to remain HSA eligible.

Notification requirements for plans regarding coverage changes. If an employer is changing its coverage of COVID-19 items and services after the end of the PHE, it must amend its plans and provide timely notification to participants. A material reduction in coverage under an ERISA-covered plan must generally be communicated to employees within 60 days after its adoption. In addition, if a material modification affects the content of the plan's summary of benefits and coverage (SBC), a revised SBC must be provided to participants at least 60 days in advance of the change. In all cases, the Departments are encouraging plans to notify participants of key information regarding changes to coverage of COVID-19 items and services. This includes the date on which the plan will stop coverage if it no longer chooses to cover COVID-19 diagnostic tests, or the date on which it will begin imposing cost-sharing requirements, prior authorization, or other medical management requirements on COVID-19 diagnostic tests.

Pursuant to prior guidance, if a plan previously communicated that it was temporarily increasing benefits coverage for COVID-19 treatment or telehealth services for the duration of the PHE only, it will be considered to have provided advance notice of any subsequent material modification for purposes of the SBC requirements if it notifies participants within a reasonable timeframe in advance of the reversal of coverage at the end of the PHE.

Impact on Deadline Extensions for Employee Benefit Plans

The termination of the National Emergency will have the following impact on plan-related deadlines:

Joint Notice. As discussed in more detail in our previous alert, on May 4, 2020, the DOL and the IRS issued a Joint Notice on delays due to COVID-19 affecting all health and retirement plans. The Joint Notice extended numerous deadlines applicable to retirement and health plans subject to ERISA. The Joint Notice requires plans to disregard the period beginning March 1, 2020, and ending the earlier of: (a) one year, or (b) 60 days after the National Emergency ("Outbreak Period") terminates in determining deadlines for:

  • Enrolling in a plan pursuant to a special enrollment event;
  • Providing COBRA election notices to qualified beneficiaries;
  • Electing COBRA;
  • Making COBRA premium payments;
  • Notifying the plan of a COBRA qualifying event or determination of disability;
  • Filing a claim for benefits under the plan's claims procedures;
  • Filing an appeal of an adverse benefit determination; and
  • Requesting external review following a final internal denial.

Governmental plans were permitted, but not required, to adopt these deadline extension pursuant to a letter from CMS, as discussed in our prior alert.

The FAQs provide helpful examples on application of the relief at the end of the Outbreak Period. The examples assume that the Outbreak Period will end July 10, 2023, based on the anticipated end of the National Emergency on May 11, 2023. The examples make clear that the relief under the Joint Notice applies to toll an applicable timeframe for taking action until the earlier of one year or the end of the Outbreak Period (July 10, 2023). Accordingly, July 11, 2023, will mark the beginning of certain timeframes, as illustrated in the following FAQ examples related to electing COBRA:

Example 1 (Electing COBRA)

Facts: Individual A works for Employer X and participates in Employer X's group health plan. Individual A experiences a qualifying event for COBRA purposes and loses coverage on April 1, 2023. Individual A is eligible to elect COBRA coverage under Employer X's plan and is provided a COBRA election notice on May 1, 2023.

What is the deadline for Individual A to elect COBRA?

Conclusion: The last day of Individual A's COBRA election period is 60 days after July 10, 2023 (the end of the Outbreak Period), which is September 8, 2023.

Example 2 (Electing COBRA)

Facts: Same facts as Example 1, except the qualifying event and loss of coverage occur on May 12, 2023, and Individual A is eligible to elect COBRA coverage under Employer X's plan and is provided a COBRA election notice on May 15, 2023.

What is the deadline for Individual A to elect COBRA?

Conclusion: Because the qualifying event occurred on May 12, 2023, after the end of the COVID-19 National Emergency but during the Outbreak Period, the extensions under the emergency relief notices still apply. The last day of Individual A's COBRA election period is 60 days after July 10, 2023 (the end of the Outbreak Period), which is September 8, 2023.

Example 3 (Electing COBRA)

Facts: Same facts as Example 1, except the qualifying event and loss of coverage occur on July 12, 2023, and Individual A is eligible to elect COBRA coverage under Employer X's plan and is provided a COBRA election notice on July 15, 2023.

What is the deadline for Individual A to elect COBRA?

Conclusion: Because the qualifying event occurred on July 12, 2023, after the end of both the COVID-19 National Emergency and the Outbreak Period, the extensions under the emergency relief notices do not apply. The last day of Individual A's COBRA election period is 60 days after July 15, 2023, which is September 13, 2023.

The FAQs provide additional examples in the context of paying COBRA premiums and special enrollment. Unfortunately, the examples do not address a situation where the deadline is based on a set date for all participants, such as a flexible spending account (FSA) claims deadline. However, in cases where there may be more than one interpretation of the Joint Notice's application, employers should consider the interpretation that results in more time for the participant to file a claim or take the required action. For example, if an FSA run-out period is 90 days after the end of the plan year, we think the employer should begin the 90-day period for claims incurred during the 2022 plan year on July 11, 2023 (the day after the end of the Outbreak Period, based on the anticipated end of the National Emergency).

Disaster Relief Notice 2020-01.

As discussed in more detail in our previous alert, on April 28, 2020, the DOL issued the EBSA Disaster Relief Notice 2020-01 which granted delays and other relief to ERISA-governed health and retirement plans during the Outbreak Period related to:

  • Notices, disclosures, and documents due under ERISA Title I during the National Emergency;
  • Failures to follow verification procedures for plan loans;
  • Loans provided pursuant to the CARES Act;
  • Forwarding repayments of participant loans to a plan; and
  • Form 5500 and Form M-1 filings

Governmental plans were permitted, but not required, to adopt these delays pursuant to a letter from CMS, as discussed in our prior alert.

Pursuant to the Notice, the DOL will not consider a plan or fiduciary to violate ERISA for failing to furnish a notice, disclosure, or document required by Title I of ERISA during the Outbreak Period if the plan and fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances.

A wide variety of notices, disclosures, and documents are required under ERISA Title I and were affected by the relief in Disaster Notice 2020-01. Many of them are listed in our prior alert linked above.

Next Steps

Employers and plan sponsors should consider how the end of the emergency periods will impact their plans and what actions to take, including, for example:

  • Plan Amendments. To the extent changes in plan coverage will affect plan language, the plan will need to be amended.
  • Updated SPDs, SMMs, and SBCs. To the extent the plan is amended, or has been amended but summary plan descriptions (SPDs) or summaries of material modifications (SMMs) have not been provided, updated SPDs and SMMs will need to be issued. In addition, if the changes affect content on the SBCs, revised SBCs must be issued in advance of the change and consistent with guidance discussed above.
  • Coordination with vendors. Employers should work with their COBRA administrators and FSA vendors to ensure that deadline extensions are appropriately applied at the end of the Outbreak Period and that qualified beneficiaries and FSA participants, respectively, receive appropriate notification about the end of deadline extension relief.
  • Notice to participants. Employers should provide notice to participants regarding any coverage changes under their group health plan in connection with the end of the PHE. They should also notify their employees about the end of deadline extensions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.