The House of Representatives has passed a bill that would require all employer group health plans—fully insured and self-funded, grandfathered and non-grandfathered—to cover testing for the coronavirus (also known as COVID-19). At the moment, it is unclear whether or when the Senate will consider the bill.
The IRS has issued relief that allows high-deductible health plans (HDHPs) to cover coronavirus testing and treatment without any cost-sharing, and without jeopardizing eligibility for a health savings account (HSA).
The Families First Coronavirus Response Act (H.R. 6201)
Under H.R. 6201, all employer group health plans must cover testing for coronavirus. If the test occurs as part of a visit to a healthcare provider—whether in an office, an urgent-care center, or emergency room—the employer plan must also cover related items and services provided during the visit. The employer plan must not impose any cost-sharing on the individual for any of the coronavirus benefits described above—no deductible, no co-payment, no co-insurance. In addition, the employer plan must not impose pre-authorization or other medical-management requirements for the benefits.
Employer group health plans are not alone. The same requirements apply to all group and individual health plans and health insurance coverages that are subject to the Affordable Care Act. The requirements of H.R. 6201 are to remain in place for the duration of the declared public health emergency.
We will be watching to see how H.R. 6201 is handled by the Senate.
IRS Relief for HDHPs and HSAs
In order to be eligible for HSA contributions, an individual must be enrolled in an HDHP. The HDHP is subject to number of different rules. As relevant here, the individual must satisfy the deductible before the plan starts paying for any benefits except “preventive care.”
Under IRS Notice 2020-15, an HDHP can pay for benefits related to the coronavirus without application of the deductible and without cost-sharing. More significantly, an individual enrolled in such an HDHP will still be eligible for HSA contributions.
Employers who want their HDHPs to offer these benefits should act promptly. Contact your issuer or third-party administrator to arrange for the benefit. Contact counsel to arrange for required amendments and notices to the enrollees.
If you have any questions regarding this client alert, or if you would like assistance with any of the requirements described here, please contact a member of Venable’s Employee Benefits and Executive Compensation Practice Group.