Ice Miller LLP: Insights

A Closer Look: Mandatory Coverage of COVID-19 Testing

Return to Summary Table of COVID-19 Legislation for Employer-Based Retirement and Welfare Plans

Background

The Families First Coronavirus Response Act (FFCRA) became law on March 18, 2020, and requires health plans to provide coverage—without any cost-sharing, prior authorization, or other medical management requirements—for in vitro diagnostic products and services related to diagnosing COVID-19.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law on March 27, 2020, and made a number of changes for health plans in relation to the COVID-19 pandemic, including expanding the requirement to cover COVID-19 diagnostic testing, clarifying the prices plans are required to pay for COVID-19 diagnostic testing, requiring coverage of COVID-19 preventive treatment within 15 days of an administrative recommendation, and adding a temporary safe harbor for HDHPs to cover telehealth services.
On April 11, 2020, the U.S. Departments of Labor, Health and Human Services, and the Treasury (together, the "Departments") jointly released frequently asked questions (FAQs) regarding the implementation of the health coverage provisions of the FFCRA and the CARES Act.

We expect the Departments to issue additional guidance implementing the FFCRA and CARES Act in the future.

Coverage Mandate Applies Broadly to Almost All Plans

The requirement under the FFCRA and the CARES Act to provide coverage—without any cost-sharing, prior authorization, or other medical management requirements—for in vitro diagnostic products and services related to diagnosing COVID-19 ("Coverage Mandate") applies to a wide variety of group health plans and health insurance issuers. Except as specifically excluded below, the Coverage Mandate applies to:

All group health plans (including grandfathered health plans); and
All health insurers of individual or group health insurance policies.

This includes:

Both self-funded and fully-insured group health plans;
Group health plans sponsored by private companies (ERISA plans);
Group health plans sponsored by non-federal governmental entities;
Group health plans sponsored by religious employers (church plans);
Coverage offered in the individual market through or outside of an Exchange; and
Student health insurance coverage.

The provision does not apply to:

Short-term limited duration insurance;
Excepted benefits (these include benefits such as on-site medical clinics, limited scope vision or dental benefits, and benefits for long-term care, nursing home care, home healthcare, community-based care, and many EAPs); and
Retiree-only group health plans.

Compliance with the Coverage Mandate will not cause a grandfathered plan to lose its grandfathered status.

So-called "excepted benefits" are exempt from a number of laws that normally apply to health plans, including many provisions of the ACA and HIPAA portability standards. EAPs are excepted benefits as long as they, among other things, do not provide significant benefits in the nature of medical care. The FAQs clarify that EAPs will not be considered to provide such benefits solely because they offer benefits for the diagnosis and testing for COVID-19 during the public health emergency. In addition, on-site medical clinics are also considered to be excepted benefits, and the FAQs confirm they will not lose that status simply by providing benefits for the diagnosis and testing for COVID-19. This means that employers may, but are not required to, provide these services through an EAP or an on-site clinic for employees who are not covered under the employer's group health plan.

Coverage Mandate Requires Coverage for Items Furnished On and After March 18

The Coverage Mandate requires coverage for items and services that were furnished on or after March 18, 2020. The Coverage Mandate continues to apply for the duration of the COVID-19 public health emergency. Unless it is extended or terminated early, the current COVID-19 public health emergency is set to expire on July 25, 2020.

Items and Services that Must Be Covered

The Coverage Mandate requires coverage (without any cost-sharing, prior authorization, or other medical management requirements) for FDA-approved in vitro diagnostic products for the detection of SARS-CoV-2 or the diagnosis of the virus that causes COVID-19, and the administration of these products. This includes diagnostic tests that:

The test developer has requested, or intends to request, emergency use authorization for under the Food, Drug, and Cosmetic Act;
Are developed in and authorized by a state that has notified HHS of its intention to review tests intended to diagnose COVID-19; or
HHS otherwise has approved in guidance.

The FAQs made clear that a required "in vitro diagnostic test" includes a serological test for COVID-19. Serological tests for COVID-19 are used to detect antibodies against the SARS-CoV-2 virus and are intended for use in the diagnosis of the disease or condition of having current or past infection with SARS-CoV-2, the virus which causes COVID-19. The Food and Drug Administration does not currently believe they should be the sole basis for diagnosis.

In addition to coverage for COVID-19 testing as just described, the Coverage Mandate also requires coverage (without any cost-sharing, prior authorization, or other medical management requirements) for items and services furnished during a visit to a provider's office (including via telehealth), urgent care, or an emergency room that results in an order for or administration of an in vitro diagnostic product described above, but only to the extent the item or service relates to: (1) the furnishing or administration of the diagnostic product, or (2) the evaluation of the individual to determine need for the diagnostic product. This requirement can include a test (such as an influenza test or a blood test) that is not an in vitro diagnostic test if the provider determines that it should be performed to determine whether COVID-19 diagnostic testing is necessary, and if the visit results in an order for, or administration of, COVID-19 diagnostic testing. The FAQs provide the following example:

Therefore, for example, if the individual’s attending provider determines that other tests (e.g., influenza tests, blood tests, etc.) should be performed during a visit (which term here includes in-person visits and telehealth visits) to determine the need of such individual for COVID-19 diagnostic testing, and the visit results in an order for, or administration of, COVID-19 diagnostic testing, the plan or issuer must provide coverage for the related tests under Section 6001(a) of the FFCRA. This coverage must be provided without cost-sharing, when medically appropriate for the individual, as determined by the individual’s attending healthcare provider in accordance with accepted standards of current medical practice. This coverage must also be provided without imposing prior authorization or other medical management requirements.

While it remains unclear, it appears that a plan would not have to cover these additional items or services if a plan participant is given a presumptive COVID-19 diagnosis and an actual COVID-19 test is not ordered. Future guidance may clarify this point. Employers may wish to automatically provide these services upon a presumptive COVID-19 diagnosis without cost-sharing or other requirements.

Most health plans and insurers likely already cover the services needed for testing COVID-19, but now they must do so without any cost-sharing or medical management requirements. Prohibited cost-sharing includes deductibles, copayments, and coinsurance. Although most plans and insurers cover the treatment of COVID-19 (through coverage of hospitalizations and other services), neither the FFCRA nor the CARES Act require that plans cover the treatment of COVID-19 without cost-sharing, prior authorization, or medical management.

Effects on HDHPs and HSA Eligibility

Pursuant to Notice 2020-15, released March 11, 2020, the IRS has ruled that HDHPs may provide health benefits associated with testing for and treatment of COVID-19 without a deductible. As a result, individuals who are covered under HDHPs that are required to cover COVID-19 testing under the FFCRA without cost-sharing will remain eligible to make contributions to an HSA. Notice 2020-15 did not provide for a specific expiration date for this relief.

Pricing of Coverage of Testing for COVID-19

The CARES Act clarified the prices that group health plans and issuers are required to pay for diagnostic tests for which coverage has been mandated. Plans that had applicable negotiated rates in effect before the COVID-19 public health emergency (i.e., prior to January 27, 2020) will pay that negotiated rate. Otherwise, plans will pay the cash price for the service listed by the provider on a public website, unless the plan or issuer can negotiate a lower rate.

The CARES Act requires that providers of diagnostic tests for COVID-19 publicize, during the COVID-19 public health emergency, the cash price for their diagnostic test on a public website. The CARES Act imposes penalties of up to $300 per day on any provider of a diagnostic test for COVID-19 that fails to publicize its price as required.

The FAQs clarify that the Coverage Mandate applies to tests and services provided by out-of-network providers. Thus, plans must reimburse out-of-network providers any negotiated rate in effect before the COVID-19 public health emergency, or otherwise the cash price for the service listed on the provider's public website.

A "Visit" Includes Both Traditional and Non-Traditional Care Settings

The Coverage Mandate requires coverage of "items and services furnished during a visit to a provider's office (which includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits." According to the FAQs, the Departments construe the term "visit" broadly to include both traditional and non-traditional care settings. This means the Coverage Mandate applies to drive-through screening and testing sites, among others.

Non-Enforcement Policy for SBC Advanced Notice Requirement

Section 2715 of the Public Health Service Act (PHSA), as added by the Affordable Care Act, requires plans to provide a Summary of Benefits and Coverage (SBC), including an updated SBC or notice if the plan makes a material modification in any of the terms that would affect the content of the SBC. Notice is required within 60 days prior to the date the modification becomes effective.

The FAQs clarify that the Departments "will not take enforcement action against any plan or issuer" that makes a coverage modification "to provide greater coverage related to the diagnosis and/or treatment of COVID-19," even if the plan/issuer does so without providing at least 60 days' advance notice. This non-enforcement policy also applies to plans and issuers that change coverage to provide telehealth and other remote care services.

Both non-enforcement policies apply to changes made during the public health emergency or national emergency declaration related to COVID-19. They cease to apply once the emergency declarations expire.

Importantly, plans and issuers must still provide notice of their coverage changes "as soon as reasonably practicable." In addition, the Departments will continue to take enforcement action against any attempts to limit or eliminate benefits or increase cost-sharing to offset the expense of the Coverage Mandate.

States May Impose Additional Requirements

State laws may go further and require more expansive coverage of COVID-19 testing and treatment as long as the state requirements do not prevent the application of a federal requirement, and as long as the requirements are not preempted by ERISA, which is generally applicable to self-funded group health plans not affiliated with a governmental or a religious entity.

For more information about the employee benefit implications of the COVID-19 pandemic and how they might affect your employee benefit plans, please contact any one of Ice Miller's Employee Benefits attorneys. Please contact our COVID-19 Task Force if you have any questions about managing the risks of the coronavirus pandemic. Also see our Coronavirus (COVID-19) Resource Center for additional resources, which is updated daily.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.