COVID-19 Changes to Health Plans Must Be Documented, Circulated

A number of plan sponsors have made changes to their group health plans in response to the COVID-19 pandemic, such as covering testing and sometimes treatment without any cost-sharing by the plan enrollee.

But any changes that are made must be followed up by amending the plan and communicating the changes to the enrollees.

Under the Employee Retirement Income Security Act, all health plans are required to deliver a Summary Plan Description (SPD) to enrollees to inform them of the full spectrum of coverage and their rights under the plan.

Whenever a plan sponsor makes a material modification to the terms of the plan or the information required to be in an SPD, they must amend the plan and let participants know about the change through a Summary of Material Modification (SMM).

Material changes

To qualify as “material,” a change must be important to plan enrollees. Examples include adding or eliminating a benefit, changing insurance companies, or changing rules for dependent eligibility.

Plan changes related to the COVID-19 pandemic that would have to be included in the SMM and SPD could include:

  • Offering continuing coverage to staff who would otherwise lose coverage due to a furlough, layoff or reduction of hours.
  • Changing eligibility terms to allow workers who may not have been eligible for coverage before to secure coverage (this could include part-time workers).
  • Covering a larger portion of an employee’s premium share.
  • Adding an employee assistance program to provide counseling for workers who may be undergoing unusual stress.
  • Adding telemedicine coverage.
  • Using funds in health savings accounts (HSAs) and flexible spending accounts (FSAs) to purchase over-the-counter medications.
  • Covering COVID-19 testing with no cost-sharing. 
  • Covering COVID-19 treatment without cost-sharing.

Some of the above changes are required by new laws and health plans must respond accordingly by changing their SMMs and SPDs. For example, the Families First Coronavirus Response Act requires that group health insurance and individual health insurance plans cover coronavirus testing with zero cost-sharing.

And the Coronavirus Aid, Recover and Economic Stabilization Act reverses an Affordable Care Act rule that barred policyholders from using funds in HSAs and FSAs to pay for over-the-counter medications. 

When the plan sponsor adopts these changes, it must also amend its plan summaries.

And SMMs must be delivered to plan participants within 60 days after a change has been adopted. You can deliver the SMM by mail, e-mail or posting it on your company’s intranet site. It’s recommended at this time that you opt for e-mail delivery.

One of the issues that may come up with any changes implemented in response to the COVID-19 outbreak is that some of the changes may be temporary. 

If that’s the case, the plan needs to include the termination date of any benefits that are adopted on a temporary basis.

However, if you don’t know how long the temporary benefits will be in effect, their temporary nature must be communicated in the SMM. Employers need to issue another SMM when the temporary benefit or coverage term ends.

The takeaway

This is an unusual time and unusual times call for unusual measures. It’s unusual for changes to be made to a plan in the middle of a plan year but because of the way the pandemic crash-landed, many plan sponsors have had to make changes. 

That said, you should work with us and your carrier on ensuring that the amended documents are sent out to staff.

As the employer, you should be aware of all the changes that have been made in response to COVID-19 so you can discuss them with any employees that have concerns or questions.

Some Insurers Step Up Group Health Plan Assistance

Some health insurers are helping business workers in group plans maintain employee benefits during the COVID-19 pandemic, a new survey has found. 

Social distancing and stay-at-home orders have put the hurt on hundreds of thousands of businesses across the country, which has forced them to reduce employees’ hours, furlough them or lay them off.

Besides all those employees seeing their pay drastically curtailed or disappear altogether, it also affects their employee benefits, with health coverage topping the list.

With so many people concerned they may lose coverage and business owners equally worried about their employees, some insurers are stepping up by extending coverage for affected group plan participants. 

The survey by insurance research organization LIMRA found that 42% of group health plans are automatically continuing coverage for all employees for a specified period of time, and another 22% are extending eligibility on a case-by-case basis to employees whose status has changed.

About 35% of insurance companies have adjusted reinstatement rules to make it easier for those affected by COVID-19 to regain coverage, and a similar number are extending the timeframe in which employees may elect to pay or continue coverage if separated from their employer.

Nearly all carriers in the survey said they are offering premium grace periods of 60 days on average to workers unable to pay their premiums due to COVID-19, while others plan to reassess or extend those timelines if needed.

These moves are important, considering that about 70% of all workers in the U.S. receive health coverage from their jobs, according to LIMRA.

The typical scenario

When an employee is laid off or furloughed, their hours are essentially reduced to zero, which can result in a loss of eligibility to participate in their employer’s group health plan.

Group health insurers will have written documents that outline the rules for particular plans. These rules include a definition of eligible employees, including how long an employee can be absent from work before the employee will lose eligibility for insurance coverage.

Health plan documents do not usually differentiate between an employee who is terminated and one who is laid off and one who is furloughed.

To be eligible under the typical plan’s rules, an employee must work a minimum number of hours per week (usually at least 30). If an employee is under protected leave – such as Family Medical Leave Act protection – benefits continue during leave.

In other words, an employee who is not meeting the hours requirement or is not actively at work (work from home is considered actively at work) based on being terminated, furloughed  or laid off – even temporarily – will generally have their benefits terminated. They should then receive an offer of COBRA or state continuation, unless state law does not require it due to an employer’s size.

However, if an employee continues to remain eligible for the business’s group health plan during an unpaid absence, the employer will need to determine how to handle their insurance premium payments.

The takeaway

If you are concerned about benefits continuation for laid-off, furloughed or terminated employees, you can call us to see if your health plan has made any special arrangements during the COVID-19 outbreak.

We can check to see if there is any way to continue coverage for any affected employees, and for how long and at what cost to you.

Pandemic Could Depress Health Care Costs

A new study predicts that employer health care costs will be stable or could fall this year because medical care for people who are not infected with COVID-19 has actually declined precipitously during the pandemic, all of which would bode well for insurance rates.

Because of the fear of contagion, health care practitioners have expressed concern that people who have had mild heart attacks or strokes or other ailments have not gone to hospital for treatment.

Additionally, the number of elective surgeries has plummeted during the pandemic. In other words, deferred medical care is pushing down overall medical expenses borne by employers and group health plan insurers.

Several factors at play

There are other factors at play besides deferred medical care. Because people are also social distancing to protect against contracting COVID0-19, they are not contracting other communicable diseases like the cold and flu. 

Also, because of shelter-at-home orders, people are not involved in as many accidents, like vehicle crashes and sports injuries. Violent crime, shootings and stabbings have also plummeted, meaning fewer people are coming to the emergency room with serious or life-threatening injuries. 

“With treatment for COVID-19 top of mind, people have been putting off non-emergency medical care, including routine office visits and elective procedures at hospitals,” said Trevis Parson, chief actuary of Willis Towers Watson. “Given this reduction in use of medical services, we expect cost reductions due to care deferral to more than offset projected cost increases associated with COVID-19 infections.”

The WTW study notes that infection levels vary greatly from city to city and region to region. Less densely populated areas are faring better than large cities. It estimates overall health care costs this year based on various infection rates and how much medical care is deferred as follows:

  • In areas with a 1% infection level (rural areas) – Employer costs could decline between 1% and 4%.
  • In areas with a 15% infection level (large cities and surrounding areas) – Employer costs could rise or fall by roughly 1%.
  • In areas with a 20% infection level (large metropolises) – Employer costs could rise between 1% and 3%.

WTW noted that ultimately the financial impact on group health care plans will depend on how much the virus spreads and how severe the illness is in those people who are hospitalized. 

The estimates in the analysis only reflect increases to employer medical and pharmacy claim costs for this year. Other health care plan costs, such as dental and vision, will likely see lower costs in 2020, as employees will likely eliminate some discretionary care.

The analysis also does not consider other impacts, including non-health benefit costs (e.g., disability and life insurance), increased mortality and broad negative economic impact.

The study is an update to a WTW analysis released in late March that estimated employers could see health care benefit costs rise by 7% due to the pandemic.

At the time, WTW estimated that at a 10% infection level, benefit costs could rise by 1% to 3%, while a 30% infection level could see costs rise by 4% to 7%. At the highest rate included in the analysis, a 50% infection level, costs could rise between 5% and 7%.

Another study by ehealth.com backs up WTW’s findings. An earlier poll of health insurers found that COVID-19 will have little effect on 2021 health insurance product menus or premiums. In fact, 83% of insurers polled said they did not anticipate raising rates in 2021 as a result of the crisis. 

Although 17% of the insurers said they thought COVID-19 could lead to an increase in rates, none predicted COVID-19 would increase 2021 rates by more than 5%, according to the survey.

Other positives

The ehealth.com survey of 33 insurance companies also found the following:

  • 32 insurers said they are waiving deductibles and other out-of-pocket costs for testing.
  • 19 insurers said they are waiving out-of-pocket costs for COVID-19 treatment.
  • 32 insurers are seeing enrollees make more use of telemedicine services.

How to Open Shop and Bring Staff Back to Work

If your business is preparing to open due to a relaxation of shelter-at-home orders, you should proceed with caution and make sure you have safeguards in place to protect your workers, as well as customers if they are entering your premises.

How can you take that first step back to a semblance of normalcy?

Here are some recommendations from the Los Angeles Department of Public Health and other sources that can apply to any municipality anywhere in the country. The advice mainly applies to establishments that will have customers, but most of the recommendations are relevant across a wide swath of sectors.

Measures to protect employees

  • If someone can continue working from home, let them do so.
  • Tell employees not to come to work if sick.
  • If any employee tests positive for, or has symptoms consistent with COVID-19, you should:

– Ask that they isolate themselves at home, and

– Ask all employees who have come in contact with that colleague to immediately self-quarantine at home.

  • Check employees for symptoms or a fever before they enter the workspace. This must include a check-in concerning cough, shortness of breath or fever and any other symptoms the employee may be experiencing.
    These checks can be done remotely or in person upon the employee’s arrival. A temperature check should be done at the worksite, if feasible.
  • Offer at no cost to your employees cloth face coverings if they are going to have contact with the public during their shift. If they are disposable, masks should be thrown away at the end of every shift. If they are reusable, they should be washed after every shift in hot water.
  • Instruct employees not to touch the exterior of their mask when removing and handling it.
  • Disinfect break rooms, restrooms and other common areas frequently.
  • Place hand sanitizer in strategic locations.
  • Allow employees to take frequent breaks to wash their hands.

Signage

Place signs at each public entrance of your facility to inform all employees and customers that they should:

  • Avoid entering the facility if they have a cough or fever.
  • Maintain a minimum 6-foot distance from one another.
  • Wear a mask for their own protection, as well as for the safety of others.

Controlling crowds, lines

Limit the number of customers in the store at any one time, to allow customers and employees to easily maintain at least 6-foot distance from one another at all practicable times.

Post an employee at the door to ensure the maximum number of customers in the facility is not exceeded. If people are queueing up, mark the ground outside the store to ensure proper social distancing.

If you have a restaurant, encourage people not to crowd and wait outside. Set up a system to alert people by cellphone when they are next.

Spacing between employees

  • Require employees to work at least 6 feet apart. You may need to reorganize your office or workstations to ensure proper spacing.
  • In jobs where workers are on their feet, you can mark spots on the floor where they should stand to ensure social distancing between your staff.
  • Social distancing in break rooms and supply areas (such as device charging stations and packaging supplies) may be addressed temporarily by spacing out tables, chairs and microwaves.
  • Another option is to use partitions made of plexiglass so workers can communicate and make eye contact.
  • In addition, you may want to abandon the popular open workspace concept and revert to using cubicles, which gained popularity in the 1980s and 1990s as a way to increase productivity by putting barriers between office workers. Having that divider will make your staff feel safer and can offer some protection.
  • Reconfigure furniture placement in offices, public seating areas and other non-warehouse or production areas to support physical distancing.

Cleaning and circulation

A recent research study that analyzed superspreading events showed that closed environments with minimal ventilation strongly contributed to a characteristically high number of secondary infections.

If you have fans or air conditioning units blowing, take steps to minimize air from fans blowing from one worker directly at another. Also consider opening windows to improve circulation.

Also important are:

  • Disinfecting frequently touched surfaces in workspaces, as well as doorknobs, buttons and controls. More frequent cleaning and disinfection may be required based on level of use.
  • Providing workers and customers with tissues and trash receptacles.
  • Employees who are cleaning and disinfecting should wear disposable gloves.
  • Cleaning surfaces using soap and water, then using disinfectant.
  • Sanitizing any other personal protective equipment such as hardhats after every shift.

IRS Allows Mid-Year Changes to Health Plans, FSAs

The IRS has loosened restrictions on employees who want to make changes to their group health plans and flexible spending accounts (FSAs) in the middle of the policy year.

IRS rules are typically stringent and rigid, barring changes from being made to health plans except during open enrollment. Under the new rules, the employer would still have to approve letting staff make changes to their plans if they have more than one option to choose from.

The IRS issued the new guidance after employer groups lobbied the agency and Congress to loosen the rules because the COVID-19 pandemic has led to profound changes in employees’ health care needs as well as access to childcare.

The new rules are temporary and apply only to 2020. All of the following mid-year changes must be approved by the employer;

Health plan changes: Employers can let employees make mid-year changes that would be in effect for the remainder of the year. The new guidance allows employees to:

  • Drop out of their health insurance if they have another option,
  • Sign up for insurance if they have not done so,
  • Add family members to their plan, or
  • Switch to a different health insurance plan.

Allowing these changes could be beneficial to employees who have had their salaries cut, or were furloughed, but were able to retain their health coverage. Someone in this position, for example, may decide to switch to a lower-cost health plan if they are unable to afford the premiums on their current plan. 

Flexible spending accounts: Employees must decide before the plan year starts how much to set aside every paycheck into their FSA, the funds of which can be used to pay for health care-related expenses. Under the new guidance, they are allowed to make changes to their contribution levels mid-year.

Employees that expect more medical expenses and are able to afford it, can elect to increase their FSA funding. But those who may have been setting aside funds for an elective surgery that they may want to postpone, can chose to decrease the amount they put into their FSA every month.

Carryover amount: Regulations governing FSAs require employees to use all of the funds in their FSA in a given year or lose it. There are two exceptions: Employers can give employees a two-and-a-half-month grace period after the end of the plan year to spend remaining funds that are in the account at the end of the year, or they can let workers carry over up to $500 from one year to the next.

Starting this year, the carryover limit will be set at 20% of the maximum health care FSA contribution limit, which is indexed to inflation. That means that for 2020, employers can let employees carry over up to $550 into 2021.

The takeaway

While allowing your employees to make changes can help them better budget their health care spending, making the change will result in extra administrative expenses for you. Changing plans mid-year, signing up employees for new plans and adding dependents can involve a significant amount of paperwork and documentation.

That said, allowing employees to make these changes mid-year could help them better budget their health care spending and give them some extra peace of mind.

What COVID-19 Services Your Health Plan May Cover

Under two new laws new laws that took effect in March, all health plans must cover testing, preventative services and vaccines for COVID-19 without cost-sharing.

The Families First Coronavirus Response Act requires that group health insurance and individual health insurance plans cover coronavirus testing with zero cost-sharing. This includes deductibles, copayments and coinsurance for items and services provided during a provider visit, whether it is in-person, telehealth-enabled, at an urgent care center, or in an emergency room.

It also waives prior authorization and other “medical management requirements.”

That law was followed up 10 days later by the CARES Act, which requires group plans and individual market plans to cover preventative services and vaccines for COVID-19 without cost-sharing. The coverage applies both to the test itself and to the visit in which the test was administered.

Unfortunately, neither law requires that health plans cover COVID-19 treatment, which would include medication and in-hospital services if you or a member of your family needed to be hospitalized.

Telehealth services

The CARES Act greatly expands the availability of telehealth services beyond diagnosis and treatment for COVID-19 in order to expand access to care. 

As part of the law, the Federal Communications Commission will receive $200 million to provide telecommunications and information services and devices.

Also, restrictions on health savings accounts have been waived to allow high-deductible health plans to cover telehealth services without a deductible. 

The CARES Act also removes the existing requirement that a Medicare beneficiary have a pre-existing patient/provider relationship in order to be treated through telehealth.

The new law also authorizes federally qualified health centers and rural health clinics to be sites for telehealth consultations, and it enhances payments for such telehealth services provided during the emergency period.

The mandate that a number of Medicare services require face-to-face meetings (such as home dialysis patients, home health, and hospice care) has been waived for the duration of the outbreak. The CARES Act also appropriates $25 million for telemedicine and distance learning in rural areas. 

Beware of treatment costs

While most private health plans likely cover most items and services needed to treat complications due to COVID-19, there is no clear federal requirement to do so.

The essential health benefits standard under the ACA defines categories of services to be covered, but it is left to states to designate “benchmark” policies that define specific covered services.

As a result, coverage for at least some services needed to treat COVID-19 ― such as home-delivered care, telemedicine visits, or respiratory therapy visits ― are likely to vary under health insurance plans that are subject to the essential health benefits standard.

Nearly all private health plans use networks of participating hospitals, doctors, laboratories and other providers.

One issue that health plan enrollees have to watch out for is going out of network for coronavirus testing or care.

HMOs, for example, could deny claims for out-of-network services, other than emergency services. Under PPO plans that provide some coverage for out-of-network care, patients can face higher cost-sharing (e.g., patients might be required to pay 20% coinsurance for in-network claims and 50% coinsurance for out-of-network claims.)

In addition, out-of-network care exposes patients to “balance billing,” or the difference between the provider’s undiscounted charge and the amount the health plan considers reasonable. If you are seeking care, make sure you are going to an in-network provider to avoid any undue surprises.

Some Insurers Step Up Group Health Plan Assistance

Some health insurers are helping business workers in group plans maintain employee benefits during the COVID-19 pandemic, a new survey has found. 

Social distancing and stay-at-home orders have put the hurt on hundreds of thousands of businesses across the country, which has forced them to reduce employees’ hours, furlough them or lay them off.

Besides all those employees seeing their pay drastically curtailed or disappear altogether, it also affects their employee benefits, with health coverage topping the list.

With so many people concerned they may lose coverage and business owners equally worried about their employees, some insurers are stepping up by extending coverage for affected group plan participants. 

The survey by insurance research organization LIMRA found that 42% of group health plans are automatically continuing coverage for all employees for a specified period of time, and another 22% are extending eligibility on a case-by-case basis to employees whose status has changed.

About 35% of insurance companies have adjusted reinstatement rules to make it easier for those affected by COVID-19 to regain coverage, and a similar number are extending the timeframe in which employees may elect to pay or continue coverage if separated from their employer.

Nearly all carriers in the survey said they are offering premium grace periods of 60 days on average to workers unable to pay their premiums due to COVID-19, while others plan to reassess or extend those timelines if needed.

These moves are important, considering that about 70% of all workers in the U.S. receive health coverage from their jobs, according to LIMRA.

The typical scenario

When an employee is laid off or furloughed, their hours are essentially reduced to zero, which can result in a loss of eligibility to participate in their employer’s group health plan.

Group health insurers will have written documents that outline the rules for particular plans. These rules include a definition of eligible employees, including how long an employee can be absent from work before the employee will lose eligibility for insurance coverage.

Health plan documents do not usually differentiate between an employee who is terminated and one who is laid off and one who is furloughed.

To be eligible under the typical plan’s rules, an employee must work a minimum number of hours per week (usually at least 30). If an employee is under protected leave – such as Family Medical Leave Act protection – benefits continue during leave.

In other words, an employee who is not meeting the hours requirement or is not actively at work (work from home is considered actively at work) based on being terminated, furloughed  or laid off – even temporarily – will generally have their benefits terminated. They should then receive an offer of COBRA or state continuation, unless state law does not require it due to an employer’s size.

However, if an employee continues to remain eligible for the business’s group health plan during an unpaid absence, the employer will need to determine how to handle their insurance premium payments.

The takeaway

If you are concerned about benefits continuation for laid-off, furloughed or terminated employees, you can call us to see if your health plan has made any special arrangements during the COVID-19 outbreak.

We can check to see if there is any way to continue coverage for any affected employees, and for how long and at what cost to you.

10 Potential Causes of Employee COVID-19 Lawsuits

The novel coronavirus that broke out in the winter has caused immeasurable suffering, both physical and economic.

For employers struggling to stay in business, this is a fraught time where mistakes in managing their workforces could lead to employee lawsuits. Here are 10 potential trouble spots to watch for.

Workplace safety – Businesses that still have employees working on-site run the risk that a single infected worker may send the virus ripping through the entire workforce.

While workers’ compensation laws may prevent employees from suing, their family members who become ill or suffer through a worker’s illness face no such constraints.

Sick time and paid leave – Congress enacted the Families First Coronavirus Response Act in March, guaranteeing full-time employees of small businesses 80 hours of sick leave (part-timers get a prorated amount.)

State and local laws may entitle workers to additional leave. Mistakes in administering these benefits could prompt lawsuits.

Workplace discrimination – Because the coronavirus originated in China, there have been reports of Asian-Americans being targets of racist actions. Employers must take care to avoid the appearance of making workplace decisions based even partly on employees’ race. 

Americans with Disabilities Act – The ADA prohibits discrimination against disabled individuals and requires employers to make reasonable accommodations for these workers.

Employees who become ill from COVID-19 (the illness caused by the virus) may suffer after-effects that include trouble breathing, speaking and working at their former pace. Employers must accommodate these workers to the extent that is practical.

Wage and hour violations – Non-exempt employees working remotely may be working more than their regular hours, missing rest and meal breaks, and using their own equipment.

Employers must keep careful records, reimburse employees for their use of personal equipment where warranted, and remind employees to take mandatory breaks.

Battered retirement plans – Stock markets have cratered since the beginning of the year, taking retirement account balances down with them.

Questions may be asked about whether fund managers did enough to limit the damage. Employees who are not satisfied with the answers may go to court. 

Health information privacy – Employee health information privacy is protected by law. Employers must secure the records of infected employees from unauthorized access by individuals within and outside the company.

Union contracts – Collective bargaining agreements may contain provisions that go beyond federal requirements for breaks, paid leave, layoff notices, and workplace safety.

Employers must keep their CBAs in mind and work with their unions to avoid contract violations.

Disparate impact from layoffs – If layoffs are necessary, employers must take a thoughtful approach when deciding which employees to part company with.

An appearance of singling out older workers or other protected classes under discrimination laws could invite lawsuits.

WARN Act – The Workers Adjustment and Retraining Notification Act requires some employers to provide at least 60 days’ notice before layoffs. Many businesses’ revenues fell off the cliff so quickly that they were unable to provide that much notice.

A final thought

The pandemic is a crisis that few businesses foresaw. The effects, including the litigation, may haunt them for a long time to come.

COVID-19 Changes to Health Plans Must Be Documented, Circulated

A number of plan sponsors have made changes to their group health plans in response to the COVID-19 pandemic, such as covering testing and sometimes treatment without any cost-sharing by the plan enrollee.

But any changes that are made must be followed up by amending the plan and communicating the changes to the enrollees.

Under the Employee Retirement Income Security Act, all health plans are required to deliver a Summary Plan Description (SPD) to enrollees to inform them of the full spectrum of coverage and their rights under the plan.

Whenever a plan sponsor makes a material modification to the terms of the plan or the information required to be in an SPD, they must amend the plan and let participants know about the change through a Summary of Material Modification (SMM).

Material changes

To qualify as “material,” a change must be important to plan enrollees. Examples include adding or eliminating a benefit, changing insurance companies, or changing rules for dependent eligibility.

Plan changes related to the COVID-19 pandemic that would have to be included in the SMM and SPD could include:

  • Offering continuing coverage to staff who would otherwise lose coverage due to a furlough, layoff or reduction of hours.
  • Changing eligibility terms to allow workers who may not have been eligible for coverage before to secure coverage (this could include part-time workers).
  • Covering a larger portion of an employee’s premium share.
  • Adding an employee assistance program to provide counseling for workers who may be undergoing unusual stress.
  • Adding telemedicine coverage.
  • Using funds in health savings accounts (HSAs) and flexible spending accounts (FSAs) to purchase over-the-counter medications.
  • Covering COVID-19 testing with no cost-sharing. 
  • Covering COVID-19 treatment without cost-sharing.

Some of the above changes are required by new laws and health plans must respond accordingly by changing their SMMs and SPDs. For example, the Families First Coronavirus Response Act requires that group health insurance and individual health insurance plans cover coronavirus testing with zero cost-sharing.

And the Coronavirus Aid, Recover and Economic Stabilization Act reverses an Affordable Care Act rule that barred policyholders from using funds in HSAs and FSAs to pay for over-the-counter medications. 

When the plan sponsor adopts these changes, it must also amend its plan summaries.

And SMMs must be delivered to plan participants within 60 days after a change has been adopted. You can deliver the SMM by mail, e-mail or posting it on your company’s intranet site. It’s recommended at this time that you opt for e-mail delivery.

One of the issues that may come up with any changes implemented in response to the COVID-19 outbreak is that some of the changes may be temporary. 

If that’s the case, the plan needs to include the termination date of any benefits that are adopted on a temporary basis.

However, if you don’t know how long the temporary benefits will be in effect, their temporary nature must be communicated in the SMM. Employers need to issue another SMM when the temporary benefit or coverage term ends.

The takeaway

This is an unusual time and unusual times call for unusual measures. It’s unusual for changes to be made to a plan in the middle of a plan year but because of the way the pandemic crash-landed, many plan sponsors have had to make changes. 

That said, you should work with us and your carrier on ensuring that the amended documents are sent out to staff.

As the employer, you should be aware of all the changes that have been made in response to COVID-19 so you can discuss them with any employees that have concerns or questions.

Medicare Advantage, Part D Plans Get COVID-19 Leeway

The Centers for Medicare and Medicaid Services has issued new guidance regarding how Medicare Advantage and Part D plans can respond to enrollees affected by the coronavirus outbreak.

Under the guidance, the plans are authorized, but not required to waive out-of-pocket costs for testing, treatment and other services related to the coronavirus.

The rules come on the heels of many of the country’s largest insurance companies announcing that they would be treating at least COVID-19 testing as covered benefits and would waive cost-sharing for tests.

The CMS made the announcement in light of the fact that COVID-19, which is caused by the coronavirus, has the most severe effects on the elderly population, as well as people with pre-existing health conditions like heart disease, cancer, diabetes and compromised immune systems. 

“Medicare beneficiaries are at the greatest risk of serious illness due to COVID-19 and CMS will continue doing everything in our power to protect them,” CMS Administrator Seema Verma said in a prepared statement. She added that the new guidance was aimed removing “barriers that could prevent or delay beneficiaries from receiving care.”

In the new COVID-19 guidance Medicare Advantage and Part D plans can:

  • Waive cost-sharing for testing.
  • Waive treatment cost-sharing, including primary care, emergency department, and telehealth services.
  • Eliminate prior authorizations for treatment.
  • Eliminate prescription refill restrictions.
  • Decrease limitations around home or mail prescription delivery.
  • Increase patient access to telehealth care.

These waivers are aimed at breaking down barriers to accessing care and allow plans to work with pharmacies and providers to treat patients.

Medicare Advantage rule changes

Under the new guidance, if a state of emergency is declared in your state, Medicare Advantage insurers are required to:

  • Cover Medicare Parts A and B services and supplemental Part C plan benefits furnished at non-contracted facilities, as long as they have participation agreements with Medicare.
  • Provide the same cost-sharing for enrollees at non-plan facilities as if the service or benefit had been furnished at a plan-contracted facility.
  • Make changes that benefit the enrollee effective immediately without the typical 30-day notification requirement (such as changes like reductions in cost-sharing and waiving prior authorizations).

The CMS said it would continue toexercise its enforcement discretion regarding the administration of Medicare Advantage plans’ benefit packages in light of the new emergency guidance.

Part D changes

Under the new rules:

  • Part D insurers may relax their “refill-too-soon” rules if circumstances are reasonably expected to result in a disruption in access to drugs. The rules may vary, as long as they provide access to Part D drugs at the point of sale. Part D sponsors may also allow an affected enrollee to obtain the maximum extended day supply available under their plan, if requested and available.
  • Part D insurers must ensure enrollees have adequate access to covered Part D drugs if they have to get their prescription filled at an out-of-network pharmacy in cases when those enrollees cannot reasonably be expected to obtain covered Part D drugs at a network pharmacy.
    Plan cost-sharing levels would still apply and enrollees could be responsible for additional charges (i.e., the out-of-network pharmacy’s usual and customary charge), if any, that exceed the plan allowance.
  • If enrollees are prohibited by a mandatory quarantine from going to a pharmacy to pick up their medications, Part D insurers can relax any plan-imposed rules that may discourage mail or home delivery, for retail pharmacies that choose to offer these delivery services in these instances.
  • Part D insurers may choose to waive prior authorization requirements at any time that they otherwise would apply to Part D drugs used to treat or prevent COVID-19, if or when such drugs are identified. Any such waiver must be uniformly provided to similarly situated enrollees who are affected by the disaster or emergency.

The takeaway

With these new rules and guidelines in place, if you are a Medicare recipient, this news should give you comfort as it should mean reduced costs and access to care and medicine as the outbreak continues.

If you are concerned about coverage, you can contact your Medicare Advantage plan to confirm that it has made the necessary changes to ease the burden on policyholders during the coronavirus crisis.