Judy Kamens Compliance Specialist View Bio

HIGHLIGHTS

Employers may be considering the following changes to their health plans:

  • Waiving certain eligibility requirements for employees who are furloughed or laid off
  • Offering a special mid-year enrollment window
  • Allowing a health FSA or HRA to reimburse OTC drugs and menstrual care products
  • Allowing an HDHP to cover COVID-19 treatment and telehealth without a deductible

IMPORTANT DATES

Jan. 1, 2020
Health FSAs and HRAs can reimburse OTC drugs and menstrual care products.

March 27, 2020
HDHPs can reimburse telehealth and other remote care services without a deductible.

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Employers may be considering changes to their group health plans in response to the ongoing COVID-19 pandemic. In some cases, health insurance issuers for fully insured plans may be initiating some of these changes to help individuals impacted by the pandemic. These changes may include:

  • Waiving certain eligibility requirements for employees who have been furloughed or laid off or had their hours reduced; and
  • Offering a special mid-year enrollment window for employees who did not elect coverage during the last open enrollment period.

In addition, due to COVID-19 relief legislation, employers with health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) can amend these plans to allow for tax-free reimbursement of over-the-counter (OTC) drugs and menstrual care products.

COVID-19 legislation also allows employers with high deductible health plans (HDHPs) to amend their plans to allow coverage of COVID-19 treatment and telehealth and other remote care services, without a deductible.

ACTION STEPS

Employers that make changes to their plan’s eligibility and enrollment rules should obtain prior written approval from their issuer (or stop-loss carrier for self-insured benefits). Also, employers that make health plan changes may need to update their plan documents and must communicate the changes to employees through a summary of material modifications (SMM).

In addition, employers that offer special mid-year enrollment opportunities must consider the tax rules for premium payments.

Waiving Eligibility Requirements

Some health insurance issuers and group health plans are waiving certain eligibility requirements (for example, active employment or hours of service) to provide coverage to employees who would otherwise lose eligibility because they have been furloughed or laid off or had their hours reduced.

Employers that want to make these eligibility changes should take the following steps:

  • To avoid any unintended liability, employers with fully insured health plans should obtain their issuer’s written approval before making any changes in plan eligibility requirements. For self-insured health plans, employers should obtain this prior approval from their stop-loss carriers.
  • Review the plan’s documents to determine whether the plan’s eligibility rules need to be updated to include these revised eligibility requirements; and
  • Communicate the changes to employees. To do this, employers can provide an SMM. See below for more information on the deadlines for providing an SMM.

In addition, as a compliance reminder, employers that are subject to the Affordable Care Act’s (ACA) employer mandate rules (or employer shared responsibility rules) and using the look-back measurement method to determine full-time employee status for plan eligibility should continue to follow the same general rules that applied before the COVID-19 outbreak. Under these rules, all paid leave must be taken into account and special rules apply for certain types of unpaid leave, including FMLA leave, and for rehired employees. Federal agencies have not issued any special guidance about the ACA’s employer mandate rules in light of the COVID-19 outbreak.

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