The IRS, US Department of Labor and US Health and Human Service agencies have issued interim final regulations addressing group health plan coverage of COVID-19 testing and vaccines. You can access the HSS Fact Sheet and HHS News Release for broader background. These new rules are effective immediately and will sunset at the end of the COVID-19 public health emergency (see our public health emergency Update here).
In summary, the new interim final rule does the following, among other things:
Vaccines – The rule implements the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) requirement that non-grandfathered group health plans and insurers in the group and individual markets provide coverage, without cost sharing, for COVID-19 vaccines recommended by the CDC’s United States Preventive Services Task Force (USPSTF) within 15 business days of the recommendation:
Plans must also cover the cost of a vaccine’s administration.
Additionally, if a COVID-19 vaccine is not billed separately (or is not tracked as individual encounter data separately) from an office visit and the primary purpose of the office visit is the delivery of the COVID-19 vaccine, then the plan may not impose cost-sharing requirements with respect to the office visit.
For an out-of-network provider, the plan must reimburse the provider “in an amount that is reasonable, as determined in comparison to the prevailing market rates for such service.”
Note that a plan would not have to reimburse the provider for the cost of the vaccine itself, if there is no cost to the provider, for example, because it is provided for free by the federal government to the provider.
You can see the Centers for Medicare & Medicaid Services (CMS) toolkits designed to help the health care system prepare to swiftly administer the vaccine once it is available.
Testing – The agencies updated the CARES Act testing coverage requirement to clarify that both grandfathered and non-grandfathered plans must cover a broad range of COVID-19 related diagnostic items and services, including the traditional COVID-19/PCR test, antigen tests, and antibody tests:
These rules apply to all employer-based insured or self-insured plans, whether they are private, governmental, or church plans.
You can visit COVID-19 Testing: Frequently Asked Questions from the Congressional Research Service for background on the requirements for private health insurance coverage of COVID-19 testing (pages 22-28).
The rule also implements the CARES Act requirement that providers make public the cash prices of COVID-19 diagnostic tests.
For out-of-network providers, plans are to reimburse at the cash price listed by the provider on a public website or a lower negotiated rate.
Next Steps – Plan sponsors should begin to prepare to provide coverage for a COVID-19 vaccine without cost-sharing within 15 days after the USPSTF recommendation. Employers with fully insured coverage should confirm how these changes will be implemented by their carrier and how they will be communicated. Employers with self-funded plans will need to communicate this coverage and should check with the third-party administrators to make sure their systems are set up to properly process claims. Stop-loss carriers should cover these claims as it is a mandate, but employers will want to work with their carrier to confirm.
The agencies will continue to issue guidance regarding required coverage of COVID-19 testing and vaccines, and more guidance is likely given that the agencies are seeking comments on certain aspects of these rules by January 4, 2021.
Conner Strong & Buckelew will provide alerts and updates as new information becomes available. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.