Updated March 16, 2020
This legal update provides a summary of current issues and considerations with respect to group health plans and COVID-19, and addresses some of the common questions we are receiving. This page will be updated as more information becomes available.
IRS Guidance on High Deductible Health Plan Changes On March 11, 2020, the IRS issued Notice 2020-15 (the “Notice”) related to COVID-19 and High Deductible Health Plans (“HDHP”) and Health Savings Accounts (“HSA”). The Notice generally expands the types of expenses that can be paid from an HDHP before a participant has satisfied their annual deductible to include COVID-19 related expenses, without disqualifying the participant from making or receiving HSA contributions.
Typically, to be eligible to make or receive HSA contributions, an individual must be covered by an HDHP, and have no other “disqualifying coverage.” Disqualifying coverage is, in general, medical coverage that pays before the individual has satisfied the applicable annual minimum deductible. There are certain expenses, such as preventative care coverage, that can be paid from an HDHP before an individual satisfies his or her deductible.
The Notice expands the list of expenses that can be paid from an HDHP before an individual satisfies their annual deductible to include medical care services and items purchased related to testing for and treatment of COVID-19. This will allow HDHPs to pay for COVID-19 testing and treatments before an employee satisfies his or her deductible without disqualifying the individual from making or receiving HSA contributions. Employers should consult with their carrier or third-party administrator, as applicable, to determine whether any plan amendments or supplemental documents are required before communicating any changes to employees.
Waived Copays and Costs Several insurance companies have agreed to waive all copays on COVID-19 testing. This comes in the wake of the White House and individual states directing insurance companies to ease the burden of testing costs to participants.
In addition, several states including California, New York, Maryland, and Washington have mandated that full-insured health plans provide certain screening and testing, and in some states, care, for COVID-19, without cost-sharing. These state mandates apply only to fully-insured health plans.
Companies should contact their broker or carrier to confirm whether such costs will be waived, and consider communicating these changes to participants.
For companies with self-insured plans, certain service providers are considering waiving similar costs. Companies should also check with their service providers to find out how they are addressing cost-sharing with respect to testing and whether any additional steps are required.
HIPAA Considerations During this time, it’s important for employers to keep in mind their HIPAA obligations with respect to their group health plans. Most group health plans are “Covered Entities” under HIPAA, and as such are subject to certain administrative and security requirements. Individually identifiable health information (“PHI”) that is created, received, maintained, or transmitted by a health plan or a business associate of the plan, in any form (verbal, written, or electronic), must be maintained in a manner that meets the administrative and technical access controls of HIPAA.
Employers are generally responsible for ensuring that their health plans comply with HIPAA requirements. With the current situation, we anticipate employers will face an increased risk that company personnel may inappropriately access or share PHI to confirm a colleague’s COVID-19 diagnosis. Employers should take steps to ensure personnel are accessing to PHI for proper purposes, including:
- Reminding their workforce members with access to PHI of their obligations under HIPAA (and consider training, if needed);
- Regularly reviewing audit logs for inappropriate access of PHI; and
- Taking appropriate steps, including breach notifications, if a violation occurs.
Employers should keep in mind that not all health information will be PHI or subject to the requirements of HIPAA. In general, information received by a company in its capacity as an employer are not PHI. For example, sick notes, requests for leave are typically employment records and not PHI. However, other laws, such as the ADA and state privacy laws, still could apply. These situations are typically highly fact dependent, and employers should consult with counsel if in doubt.
Health Premiums During Leaves of Absences During a leave of absence, employers may take several approaches to the collection of health premiums: (1) pay as you go (this is typical where the leave is a paid leave of absence); (2) employee pays in advance; or (3) employee makes catch-up payments upon return (here, the employer typically pays the full premium for the employee during the leave and recoups it upon the employee’s return to work through additional payroll deductions). Employers should check their plan documents to confirm whether they are required to use a specific approach or whether they have flexibility to choose the desired approach for leave specifically related to COVID-19. If there is flexibility, then employers should develop and document a preferred approach. If the employee is to make catch-up payments upon return, the employer should have the employee acknowledge this approach in advance, if possible.
Telemedicine Employers should review their group health plan’s telemedicine options, and remind employees of these alternatives. Most insurance carriers offering telemedicine services can, upon request, provide a short summary of the telemedicine options and coverages available to be sent to employees.
