Covid-19 Developments Impacting Employer-Sponsored Health Plans

Recent developments on both the federal and Ohio state levels will impact health plans sponsored by Ohio employers.
On the federal level, the Coronavirus Aid, Relief and Economic Security Act, or CARES Act was signed into law on March 27, 2020.  The Act has several provisions affecting employer sponsored health plans. 

Preventive Services: The CARES Act requires employer-sponsored health plans to cover any coronavirus preventive services at no cost to participating employees as a preventive benefit under the Affordable Care Act (ACA).

Diagnostic Testing: The CARES Act requires a health plan to pay—without cost-sharing—for any item, service, or immunization that will prevent or mitigate COVID-19 that has an “A” or “B” recommendation rating from the United States Preventive Services Task Force. Health plans must cover such testing at the in-network provider negotiated rate or, if the plan does not have a negotiated in-network rate with such provider, at an amount that equals the cash price for such service as listed by the provider on a public Internet website. Health plans are also free to negotiate a lower payment rate with providers.  

Expansion of Health Savings Accounts (HSAs):  Individuals with HSAs will be able to use funds to cover telehealth services and other remote care services and purchase over-the-counter drugs and medical products without a prescription, prior to the HSA-eligible individual reaching the deductible under a high-deductible health plan (the “HDHP”). The Act also clarifies that such items are reimbursable under health care flexible spending accounts.

On the state of Ohio level, the Ohio Department of Insurance issued Bulletin 2020-03 on March 20, 2020.  The Bulletin applies to all insurance companies, including stop loss carriers, and so will affect insured health plans.  It does not apply to “self-insured” plans as provided for under the federal Employee Retirement Income Security Act, as amended (“ERISA”).

The Bulletin requires insurers to permit employers to continue covering employees under an insured employer health plan even if an employee would otherwise become ineligible due to a decrease in hours worked.  Insurers are also required to permit employers to cover employees in spite of any “actively at work” or similar requirement in a policy. 

Note that these pronouncements do not require employers to continue to extend health plan benefits to such affected employees. They merely enable an employer to do so, if desired. 

Insurers are also prohibited from increasing premium rates based on a group’s decreased enrollment or participation due to Covid-19.

Insurers are also required to provide employers with the option to defer premium payments, interest free, for up to 60 days from the original premium due date.

If you have any questions please contact any of our Employee Benefit attorneys.

Frantz Ward has established a Coronavirus Response Team to assist clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners Brian Kelly or Christopher Koehler and they will engage the appropriate members of the response team.

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