Overview
As part of the Families First Coronavirus Response Act (the “Act”), Congress eliminated patient cost-sharing for Coronavirus (COVID-19) diagnostic testing and related services provided under employer-sponsored group health plans. This impacts all employer plans, insured and self-funded, of all sizes. The provisions are effective as of March 18 and will continue on a temporary basis for at least 90 days unless extended by the Department Health and Human Services (HHS).
In Depth
Meant to result in zero cost to consumers, the Act mandates that self-funded and fully-insured group health plans (including grandfathered plans) cover all costs (e.g., copayments, coinsurance and deductibles) related to COVID-19 diagnostic testing. This includes items and services provided during:
- Urgent care center visits,
- In-person and telehealth visits, and
- Emergency room visits that result in an order for in vitro diagnostic products approved by the Food and Drug Administration,
but only to the extent such items and services relate to the provision of the diagnostic test or the evaluation of an individual to determine whether a test is necessary. The Act additionally prohibits group health plans from imposing prior authorization or other medical management requirements on any of the foregoing COVID-19 diagnostic testing services.
Though the Act promotes early detection of COVID-19 by relieving patients of diagnostic testing costs that otherwise may have proved prohibitive, as written, its provisions place responsibility on employers for virtually unlimited costs related to COVID-19 testing. This may become particularly onerous for employers where out-of-network testing and treatment are concerned.
The Act does not extend to require coverage of treatment for COVID-19 on a first-dollar basis. However, some fully-insured plans (and other self-funded plans not subject to ERISA) are subject to state mandates that require such coverage for treatment of COVID-19 without cost-sharing to the individual. These state directives and recent guidance by the IRS (see our recent On the Subject here) have raised a number of questions for employers, including the extent to which medical care can be provided on a first-dollar basis through telemedicine for other conditions without disqualifying an individual from contributing to a health savings account. More legislation or perhaps agency guidance would be welcome on these points as employers struggle to provide care for their employees amidst the growing COVID-19 pandemic.
The Act invites the Secretaries of Health and Human Services, Labor, and Treasury to implement its provisions, and McDermott will update this article or publish new thought leadership as guidance becomes available. The Act also puts in place several measures related to employee leave and medical coverage in the face of the COVID-19 pandemic, such as expanded Family and Medical Leave Act (FMLA) and sick leave, tax credits, and certain Medicare and Medicaid coverage rules.
