SPBA Email Alert – March 27, 2020
House Passes ‘Phase 3’ COVID-19 Stimulus Bill
The House of Representatives has passed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the President is expected to sign it into law quickly. This legislation is the ‘Phase 3’ response bill addressing the COVID-19 pandemic.
The law is a $2.2 trillion package of various provisions, including:
Expanded coverage for COVID-19 testing: The previous ‘phase 2’ legislation, the Families First Coronavirus Response Act, was signed into law and required group health plans to cover COVID-19 testing for FDA-approved tests. The CARES Act expands that mandate to include coverage of non-FDA-approved tests.
Specifically, it expands the coverage mandate to include tests that are:
- Approved by the FDA;
- From a developer that has requested or intends to request emergency use authorization;
- Developed in and authorized by a state that has notified HHS of its intention to review tests intended to diagnose COVID-19; or
- Determined by HHS to be appropriate in guidance.
Costs of COVID-19 Testing: The CARES Act establishes how COVID-19 diagnostics tests should be paid for. Where the plan has a pre-existing negotiated rate for the testing and related services, that rate will apply for COVID-19 tests throughout the current public health emergency. If there is no pre-existing negotiated rate and the plan does not negotiate an amount now, the plan has to pay the amount the provider has listed on a publically available website. The public posting of prices is also required by the law.
Coverage for COVID-19 Vaccine: The CARES Act includes provisions intended to expedite coverage of a COVID-19 vaccine when it is developed. Under the framework requiring coverage for preventive services established in the Affordable Care Act, plans are required to cover certain preventive services without cost-sharing. These preventive services include evidence-based services that have a rating of “A” or “B” under current U.S. Preventive Services Task Force (USPSTF) recommendations, as well as vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).
Plans usually have a year to implement new recommendations. However, under the CARES Act, plans are required to cover any item, service, or immunization to prevent or mitigate COVID-19 that has received an appropriate recommendation within 15 days after a recommendation from the USPSTF or ACIP.
High Deductible Health Plans and Telehealth: Typically, a high deductible health plan (HDHP) is only permitted to pay benefits after the deductible has been met, with the exception of preventive services, in order for plan participants to still qualify for contributions to their HSAs. In response to the COVID-19 pandemic, the IRS has issued guidance that a HDHP can cover COVID-19 testing without cost-sharing without losing HSA eligibility.
The CARES Act includes a safe harbor for HDHPs that begin on or before December 31, 2021, that provide pre-deductible coverage for telehealth and other remote care services. The plans that provide this coverage will not lose HSA eligibility. It appears this is not limited to COVID-19 related remote care services.
This is not a coverage mandate. Rather, it is our reading that it gives the plan sponsor the option to offer these remote care services on a pre-deductible basis. SPBA will be talking to regulators and seeking further clarification.
Use HSA/FSA Funds for Non-Prescription Purchases. Upon our initial review, it appears the CARES Act expands the type of eligible expenses under HSAs and FSAs to include some over the counter medicines and drugs without a prescription. SPBA will be discussing this with regulators as the bill is implemented and keep you apprised.
Future Issues and Legislative Prospects. The CARES Act is the third bill from Congress so far in response to the COVID-19 pandemic. Some members of Congress are already discussing a ‘Phase 4’ bill.
SPBA has received many questions about whether Congress will mandate treatment of COVID-19. This was not included in the CARES Act, but this does not mean it will not be included in future legislation. A number of Senate Democrats have issued a letter supporting requiring coverage of COVID-19 treatment without cost-sharing.
In the CARES Act, Congress bumped out the deadline for a variety of health extenders from May 22 to November 30. These extenders were previously the most likely vehicle for a broader surprise billing package. Understanding that a ‘Phase 4’ COVID-19 response is possible, SPBA is tracking closely whether that would include any surprise billing provisions, either broadly or COVID-19 specific.
The final CARES Act also did not include provisions that were in the original House proposal that would have provided subsidies for COBRA premiums for workers who were laid off or furloughed because of the COVID-19 pandemic. SPBA will continue tracking any Congressional activity on this proposal in any future COVID-19 response bills.
For any questions on the Congressional response to COVID-19 pandemic, please contact Erin Reiter at email@example.com.