FAQ Guidance (Part 43) on COVID-19-Related Issues Addresses Wellness Programs, Grandfathered Status, Mental Health Parity Compliance, and More

The DOL, IRS, and HHS have issued another round of FAQ guidance (Part 43) addressing implementation of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) for group health plans. As background, the FFCRA (see our Checkpoint article) generally requires group health plans and insurers to cover (without cost-sharing, prior authorization, or other medical management requirements) certain items and services related to diagnostic testing for the detection of SARS-CoV-2 or the diagnosis of COVID-19 (diagnostic tests). The CARES Act (see our Checkpoint article) requires coverage of a broader range of diagnostic items and services and generally requires plans and insurers to reimburse any provider of diagnostic tests the cash price listed by the provider on a public website or a lower negotiated rate. Here are highlights of FAQs Part 43, which build on previous guidance issued in FAQs Part 42 (see our Checkpoint article):

• Diagnostic Tests. Providing more specifics on which diagnostic tests are required to be covered without cost-sharing, Q/A-2 points out that all diagnostic tests that have received a Food and Drug Administration (FDA) emergency use authorization are listed on the FDA website, along with the clinical laboratories and commercial manufacturers that have notified FDA that they have validated their own diagnostic test and are offering the test as outlined in FDA guidance. The agencies advise that it is reasonable to assume that the listed laboratories and manufacturers have requested or intend to request an authorization, and therefore, plans and insurers must cover listed diagnostic tests. Q/A-4 explains that diagnostic tests intended for at-home testing must generally be covered, while Q/A-5 states that testing conducted to screen for general workplace health and safety (e.g., employee return-to-work programs), public health surveillance, or any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 is beyond the FFCRA’s scope.
• Out-of-Network Coverage. Noting that plans and insurers that do not already have a negotiated rate with an out-of-network provider for diagnostic tests may negotiate a rate, Q/A-9 cautions that the CARES Act generally precludes balance billing for mandated diagnostic testing. For tests administered in an out-of-network hospital emergency department, Q/A-12 advises that the CARES Act supersedes the Affordable Care Act’s (ACA) regulatory requirement to pay the greatest of three amounts, requiring the plan or insurer to reimburse out-of-network emergency providers the cash price listed by the provider on a public website, or a negotiated lower rate. For all other out-of-network emergency services, the ACA payment standards continue to apply.
• SBC Notice of Revoked Coverage. In FAQs Part 42, the agencies announced enforcement relief for plans or insurers that adopt modifications to provide greater coverage for COVID-19 diagnosis or treatment without providing the minimum 60-day advance notice to enrollees required for material modifications to the Summary of Benefits and Coverage (SBC). In Q/A-13, the agencies add that if a plan or insurer reverses these changes once the COVID-19 emergency ends, the plan or insurer will be considered to have satisfied its obligation to provide advance notice of a material modification if it previously notified participants, beneficiaries, and enrollees of the general duration of the additional benefits coverage or reduced cost-sharing, or if it notifies them within a reasonable time in advance of the reversal of the changes.
• Relief for Telehealth and Remote Care. Group health plans and insurers that solely provide benefits for telehealth or other remote-care services are exempt from certain group market reforms and mandates for the duration of any plan year beginning before the end of the COVID-19 emergency. Q/A-14 specifies that the relief is limited to telehealth and other remote-care service arrangements sponsored by a large employer (generally, one with at least 51 employees) and offered only to employees or dependents who are not eligible for coverage under any other group health plan offered by that employer. Plans and insurers providing such coverage are exempt from the prohibition on annual and lifetime limits and the preventive services mandate (among other requirements). But other mandates, such as the prohibitions of pre-existing condition exclusions and discrimination based on health status, the prohibition of rescissions, and the application of the mental health parity requirements continue to apply.
• Grandfathered Status. To the extent that a plan or insurer added benefits or reduced or eliminated cost-sharing pursuant to the agencies’ safe harbor in FAQs Part 42, Q/A-15 provides that, for the period in which the COVID-19 emergency is in effect, the plan will not lose its grandfathered status solely because these changes are later reversed.
• Mental Health Parity Compliance. Q/A-16 provides that for purposes of compliance with the mental health parity “substantially all” and “predominant” tests for financial requirements and quantitative treatment limitations, the agencies will temporarily forgo enforcement action against any plan or insurer that disregards benefits for the items and services that are covered without cost-sharing under the FFCRA. (For more information about the “substantially all” and “predominant” tests, see our Checkpoint article).
• Wellness Program Waivers. In Q/A-17, the agencies explain that plans and insurers are permitted to waive a standard (including a reasonable alternative standard) for obtaining a reward under a health-contingent wellness program if participants or beneficiaries are having difficulty meeting the standard because of circumstances related to COVID-19. However, the waiver must be offered to all similarly situated individuals, as described in the wellness regulations.
• ICHRA Notices. An individual coverage health reimbursement arrangement (ICHRA) is required to provide employees with a notice, generally at least 90 days before the start of the plan year, that includes important information about the ICHRA’s requirements and the consequences of enrollment. Under EBSA Notice 2020-01, an ICHRA notice that would otherwise be required to be furnished between March 1, 2020, and 60 days after the announced end of the COVID-19 emergency, generally may be furnished as soon as administratively practicable under the circumstances (see our Checkpoint article). Recognizing that some employers are considering offering an ICHRA for the first time, Q/A-18 encourages employers affected by the COVID-19 pandemic to consider whether they can provide the ICHRA notice far enough in advance of the first day on which the ICHRA may take effect so that eligible employees have sufficient time to read and understand the notice, make an informed decision about enrollment, and exercise their special enrollment right to individual health insurance coverage so that the coverage would start no later than the first day of the ICHRA plan year.

EBIA Comment: The 18 Q&As in FAQs Part 43 cover a lot of ground. From whether plans have to cover multiple tests for a single participant to how plans reimburse out-of-network providers that have not posted a cash price for diagnostic tests on a public website, these FAQs are a must-read for group health plan sponsors and advisors. For more information, see EBIA’s Group Health Plan Mandates manual at Sections IX.D (“Mental Health Parity: Financial Requirements and Quantitative Treatment Limitations”) and XVI.C (“Mandated Coverage of Diagnostic and Preventive Services”), and EBIA’s Health Care Reform manual at Sections VI.E (“Changes That Will Cause Loss Grandfathered Status”), XII.B.4 (“Coverage of Emergency Services”), XIV (“Insurance Mandates”), and XVI.H (“Updating the SBC: Notice of Material Modifications”). See also EBIA’s Consumer-Driven Health Care manual at Sections VI.D (“Wellness and Disease Management Programs: HIPAA Considerations”) and XXVIII.B (“Individual Coverage HRAs (ICHRAs)”), EBIA’s HIPAA Portability, Privacy & Security manual at Section XI.I (“Wellness Programs Must Meet Specific Nondiscrimination Requirements”), EBIA’s ERISA Compliance manual at Section XXIV.O (“Summary of Benefits and Coverage (SBC) Under Health Care Reform”), and EBIA’s Self-Insured Health Plans manual at Section XI.E.5 (“Telemedicine”).

Contributing Editors: EBIA Staff.