COVID-19 in 2023

Emergency Periods

The Public Health Emergency (PHE) will finally come to an end on May 11. Sixty days later, on July 10th, the ‘outbreak’ (1) period will conclude, meaning several changes for employer health plans.  

May 11th changes: Over the counter (OTC) COVID tests are no longer covered by most plans, and there may no longer be out of pocket waivers for COVID testing or treatment. Most plans will continue to cover the full cost of COVID vaccinations. (2)

July 10th changes: Original deadlines for COBRA election, payment and termination will again apply. This means anyone who misses a premium payment after July 10, or fails to elect COBRA in the time frame stated in their election notice, will no longer have the option to be reinstated. HIPAA special enrollment deadlines of 30 days (or 60 for changes to Medicaid eligibility) will apply.

Additionally, standalone telehealth plans, which some employers implemented during the COVID period, will no longer be exempt from the ACA market reforms as excepted benefits. Note that the Consolidated Appropriations Act of 2022 extended the exception for telehealth with regard to HSA eligibility through plan years beginning in 2024. This relief is optional and not mandatory for employers to adopt. There is also bipartisan legislation in the House that, if passed, would permanently extend the treatment of telehealth as excepted benefits, permitting employees not enrolled in the health plan to access these benefits. (3)

Paid Leave for COVID

New York employers must still offer 2 weeks (14 calendar days) of paid leave to any employees who test positive for COVID, or are under mandatory quarantine and cannot telework. This leave is available up to 3 times for the same employee. As of the date of this writing this leave law is still in effect, and has not expired (though paid COVID leave laws in other jurisdictions have concluded).

DOL

‘No Gag Clause’

The 2021 CAA contained a little discussed clause prohibiting health plans and providers from contractually restricting the ability of the plan to provide information to another party. (4) The Departments recently issued guidance (5) to assist plan sponsors in understanding their responsibility under the rule. In summary, Health plans cannot enter into contracts that restrict the plan from disclosing provider-specific cost information to providers, the plan sponsor, or participants, from accessing de-identified claims information, and from sharing this type of information with a TPA or business associate.

Annually, beginning December 31 2023, plans will need to make an attestation stating that they are in compliance with this rule. It is unclear at this time whether carriers will be able to complete this attestation on behalf of employer plan sponsors.

No Surprises Act

Employers will recall that the Consolidated Appropriations Act of 2021 contained a prohibition on surprise medical bills in many situations, called the No Surprises Act. Since the law’s enforcement in 2022, one key element of the rule has faced legal challenges in several states. Notably in December 2022, the Texas Medical Association (TMA) brought suit challenging the laws’ methodology for determining the ‘qualified payment amount’ (QPA) as the basis for settlement of fees under the rule. Other parties have also brought suit on the same grounds. On February 7, the Texas Court vacated the part of law governing independent dispute resolution (IDR) and QPA, leaving a  ‘hole’ in the current rule when it comes to settlement of disputed fees.

Transparency in Coverage

The annual CMS submission requirement of prescription drug data under the CAA, first required by December 27, 2022 is approaching again. By June 1,2023 prescription drug data from employer plan sponsors’ 2022 plan years will be due. Annually thereafter, this submission will be required every June. Carriers for fully insured plans have handled the majority of the data reporting, but many carriers have required employers to submit specific plan data to assist in their efforts. 

FMLA

The DOL released Field Assistance Bulletin 2023-1 to assist employers as the remote workforce has taken root in the post-COVID era.  As a reminder, employees are eligible for FMLA leave when they have worked for the employer for at least 12 months, have at least 1,250 hours of service for the employer during the 12-month period immediately preceding the leave and work at a location where the employer has at least 50 employees within 75 miles. (6)

When an employee works from home or otherwise teleworks, their worksite for FMLA eligibility purposes is “the office to which they report or from which their assignments are made”. This language means that an employee's home office is essentially disregarded when making eligibility determinations for FMLA.

HEALTH CARE REFORM

The ACA

The IRS has issued a new regulation (7), changing the electronic filing rules as they apply to small employers in 2024 and beyond. The current rules require only those employers with 250 or more forms 1095-C to file via the AIR electronic filing system. Beginning in 2024, any employer that files 10 or more forms (which includes aggregated W2 forms) will need to file via the AIR system. 

Additionally, the 2024 4980(H) ‘employer mandate’ penalties have been announced. We are still awaiting the affordability threshold at the time of this writing.

The ‘A’ penalty 2024- If Employer does not offer coverage to 95% of its full time employees, and one employee receives a subsidy to purchase insurance on the Health Exchange, the Employer is subject to a penalty equal to $2,970 x every full time employee (minus 30). 

The ‘B’ Penalty 2024- If employer offers coverage that is unaffordable, or doesn’t offer minimum value, and any employees qualify for a subsidy to purchase insurance on the Health Exchange, the employer is subject to a penalty equal to $4,460 x the number of full time employees that receive a subsidy.

(1) The ‘Outbreak Period’ is designated as the 60 days following the end of the PHE under the 2020 EBSA notice, following the initial declaration of national emergency. The outbreak period is ‘disregarded’ for many benefits deadlines, such as COBRA enrollment and payment.

(2) Each carrier has their own process for unwinding the FFCAR/CARES Act coverage so employees should check with their employer for specific plan changes as of the end of the PHE.

(3) Telehealth Benefit Expansion for Workers Act of 2023 (HR 824)

(4) IRC section 9824, ERISA section 724, and PHS Act section 2799A-9 prohibit group health plans from entering into agreements that include gag clauses

(5) FAQs Part 57

(6) 29 C.F.R. § 825.110(a)

(7) See 88 FR 11754