Tag: COBRA eligibility

The End of the COVID Public Health Emergency and Its Effect on Employee Benefit Plans

The COVID-19 public health emergency ends on May 11, 2023. The emergency resulted in two big changes to welfare plans: the relaxation of certain notification and timing requirements, and the requirement for plans to cover COVID testing and vaccination at no cost to plan participants. While the public health emergency ends May 11, 2023, plans have a grace period until July 11 to take certain actions and come into compliance with the normal rules.

Plan Sponsor Requirements

Before the grace period ends, plan sponsors will generally need to follow the rules that existed before COVID. Among the most important of these rules are the requirements for plan sponsors to:

  • Timely provide all notices, including those for HIPAA and COBRA.
  • Review COVID-related coverage under their employee assistance programs (EAPs) to determine if such coverage would be considered “significant medical care,” which can result in additional reporting and compliance obligations.
  • Review telehealth options to ensure they are properly integrated and provided by an entity that can comply with the post-COVID requirements. Telehealth rules were substantially relaxed during COVID. With telehealth now expected and utilized by more participants, getting telehealth right is more crucial than before.

Plan Sponsor Decisions

With the end of the public health emergency, plan sponsors must also make several important decisions with respect to their employee benefit plans:

  • Whether testing will continue free of charge or will be subject to cost sharing.
  • Whether non-preventative care vaccines for COVID will continue to be free of charge.
  • Whether costs for certain COVID-related services will continue to be posted.

As they are mostly based on what costs the plan sponsor or plan will cover going forward, these plan sponsor decisions are largely business-related. In the absence of a choice by the plan sponsor, the insurance provider will likely make a default choice. The important legal consideration is that the plan documents and employee communications should be consistent and accurately reflect the plan sponsor’s decisions.

Participant Requirements

In addition to the changes for plan sponsors, the end of the public health emergency will result in the reinstatement of a number of rules applicable to participants. Participants will need to:

Follow the HIPAA Special Enrollment timing rules.

Elect COBRA within the 60-day window for elections.

Make all COBRA payments timely.

Timely notify the plan of disabilities and qualifying events under COBRA.

Follow the timing limitations of their plans and insurance policies regarding filing claims, appeals, and external reviews.

Next Steps

First, plan sponsors should decide what COVID-related coverage will remain fully paid by the plan, if any. Some insurance companies are already starting to communicate with participants, and maintaining a consistent message will avoid unnecessary problems.

Second, plan sponsors should review their EAP and telehealth coverages for compliance with the rules that will soon be in effect. To the extent necessary, plan sponsors should update the documentation for their plans.

Finally, plan sponsors should consider a voluntary reminder communication to participants. Many rules have been relaxed over the last two years or so, and participants may be confused regarding the rules. A reminder may save stress for participants and those administering the plan, and will also serve to document the plan sponsor’s intention to properly follow the terms of the plan.

© 2023 Varnum LLP

For more healthcare legal news, click here to visit the National Law Review.

COBRA Alert: Enhanced Benefits for Those Eligible

On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA), which provides important health insurance benefits to certain eligible individuals. Specifically, the ARPA requires employers to cover 100% of Consolidated Omnibus Budget Reconciliation Act (COBRA) premiums from April 1, 2021, through September 30, 2021, for former employees who:

  • Became COBRA-eligible in or after November 2019;
  • Lost employer-sponsored health insurance because of an involuntary termination of employment or because of an involuntary reduction in hours; and
  • (1) Elected COBRA; (2) elected COBRA but let the coverage lapse; or (3) did not elect COBRA.

Former employees are not eligible for the ARPA COBRA subsidy if they:

  • Resigned voluntarily, or voluntarily reduced their hours;
  • Were terminated for gross misconduct;
  • Are now covered under another group health plan; or
  • Are Medicare-eligible.

Note, if COBRA coverage is set to expire before September 30, 2021, ARPA does not extend the expiration date; and many questions remain. For instance, does the ARPA COBRA subsidy extend to those who left employment per a mutual decision, for “good reason” under an employment agreement, or pursuant to a voluntary exit incentive plan? The Department of Labor is currently drafting regulations and guidance that should help answer these questions.

What Do Eligible Former Employees Need To Do?

For anyone who is covered by COBRA as of April 1, 2021, nothing needs to be done. It is up to the employer or the employer’s health insurance carrier to ensure that the premiums are paid for the relevant period. For those who let COBRA lapse or had not elected COBRA, the employer or the health insurance provider must provide notice of the new benefit and of a new enrollment period. The new enrollment period begins on April 1, 2021 and ends 60 days from delivery of the ARPA COBRA notification.

If you believe you may be entitled to coverage, are interested in receiving the benefits, and are not contacted by your former employer or their provider in the next few weeks, consider reaching out to the employer’s Human Resources Department or the insurance carrier to ask for information about your COBRA benefits under ARPA, or contact your employment lawyer.

© 2020 SHERIN AND LODGEN LLP

ARTICLE BY Gavriela M. Bogin-Farber of Sherin and Lodgen LLP
For more articles on COBRA, visit the NLR Corporate & Business Organizations section.