During this fluid time, EmPower HR looks to continue to provide our clients, prospects and partners with relevant up-to-date information. Below are some important questions and answers around Benefits and Group Health Plan Administration from one of our valued partners, Fisher Phillips.
If our employees are no longer working, are they still entitled to group health plan coverage?
Updated as of March 4, 2020
Not necessarily. You need to check your group health plan document (or certificate of coverage if your plan is fully insured) to determine how long employees who are not actively working may remain covered by your group health plan. Once this period expires, active employee coverage must be terminated (unless the insurance carrier or self-funded plan sponsor otherwise agrees to temporarily waive applicable eligibility provisions), and a COBRA notice must be sent. If your plan is self-funded and you would like to waive applicable plan eligibility provisions, you should first make sure that any stop-loss coverage insurance carriers agree to cover claims relating to participants who would otherwise be ineligible for coverage.
What happens to group health plan coverage if employees are not working and unable to pay their share of premiums?
Updated as of March 4, 2020
In the normal course of events, group health plan coverage will cease when an employee’s share of premiums is not timely paid. However, several actions might be taken that could allow coverage to continue.
First, the insurance carrier providing the health coverage may voluntarily continue the coverage while the disaster is sorted out and until an employer reopens its doors. More likely, the employer may make an arrangement with the insurance carrier providing health coverage to pay the employees’ share of premiums to keep coverage in place (at least temporarily) and possibly until the employer can reopen its doors. Each situation will be different, depending upon the insurance carrier and the relationship between the employer and the insurance carrier. Therefore, each factual situation will need to be individually assessed.
Is COVID-19 testing covered by our group health plan?
Updated as of March 15, 2020
It depends. If your plan is insured, you should contact your insurer to confirm coverage and cost-sharing parameters. As of early March 2020, insured plans in California, New York, Oregon, and Washington must cover COVID-19 testing at no cost to members, and a growing number of states are implementing similar mandates. In addition, several major insurers have stated that for insured plans, doctor initiated/provided diagnostic COVID-19 testing will be provided at no cost. Note, however, that the cost waivers applicable for testing do not extend to treatment activities at this time.
Self-insured plans are not required to provide COVID-19 coverage but are under increasing pressure to do so. Plans that want to provide coverage should note that TPAs are actively encouraging and facilitating employer coverage of diagnostic testing for Coronavirus and in at least one case, a large ASO is requiring its self-insured employer clients to “opt-out” of cost-sharing for Coronavirus testing.
Another item of particular note involves qualifying High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs). Tax free contributions, by an employee or employer, to an HSA, are permitted only if: (1) an employee is enrolled in a HDHP that is prohibited from covering most services, other than “preventive care,” before the deductible is met and (2) an employee is not covered by any health plan that is not a HDHP.
In an effort to facilitate COVID-19 efforts, the IRS issued Notice 2020-15, with specific guidance relating to HDHP qualification and HSA contribution deductibility. In Notice 2020-15, the IRS (1) clarified that vaccines are considered “preventive care” under Internal Revenue Code Section 223 and (2) provided that, until further notice, health benefits, medical services and items purchased in association with testing for or treatment of COVID-19, may be provided by a HDHP, without disqualifying the HDHP or covered individual from making HSA contributions. This latter provision essentially expands the preventive care exception to items and services purchased to test or treat this particular COVID-19 illness. Health plan language may impact what constitutes treatment and testing.
How can we better leverage existing group health benefits for our employees?
Updated as of March 12, 2020
Employers should consider enhanced promotion of current benefit offerings to ensure employees take advantage of all existing healthcare services offered, such as:
- Telemedicine services. Telemedicine may be an ideal option for persons seeking medical consultation for mild-non-emergency care. If telemedicine services are offered as part of your group health plan, services may include coordination of diagnosis and treatment plans and or specialist referrals. Telemedicine services may be utilized from the comfort of an employee’s own home and may be a valuable option for persons who want to minimize external exposure.
- Employee Assistance Programs. Employee assistance programs often provide great benefits that impact not only physical but mental health – stress management, elder care, personal finance, and substance abuse consultation are just some of the services commonly provided.
- Wellness Program Services. Wellness programs are a rich resource of education relating to disease prevention. Many offer basic education on a variety of pertinent topics such as basic hygiene and traveling tips. Wellness programs often include nurse phone line programs that can be utilized to obtain confidential responses to various health topics.
In addition to what is currently available under your plan, plan sponsors may consider permitting the plan to cover a larger range of preventive care benefits. Last year, in Notice 2019-45, the IRS and HHS expanded the types of preventive care that will not interfere with HSAs for individuals diagnosed with asthma, heart disease and diabetes – individuals that are at a higher risk of getting very sick from COVID-19. Plan sponsors may permit the plan to cover these and other specified preventive care benefits at no cost or with some form of cost sharing.
If we utilize contractors or temporary employees to supplement our labor force, may those individuals participate in our group health plan?
Updated as of March 12, 2020
It depends on plan terms. Independent contractors are most often excluded from group health plan eligibility because of potential tax issues and the risk of inadvertently creating a multiple employer welfare arrangement.
By contrast, the law allows an employer to include, or exclude, temporary employees so plan terms must be examined for guidance.
However, for ACA employer mandate purposes, temporary employees may trigger liability under the employer mandate even if hired through a staffing agency. Applicable large employers recall that ACA health insurance benefit obligations arise when an employee is reasonably expected to or actually performs 130+ hours of service in a calendar month. As a result, employers who engage temporary employees to fill short-term needs relating to COVID-19 should ensure they are classified properly for eligibility purposes and that hours are measured in compliance with the employer’s ACA measurement method for full-time employees.