After three long years, the COVID-19 pandemic as we know it is ending. Before I get into the details of expiring regulations, let’s take a moment to appreciate the astonishing amount of work the benefits industry collectively achieved. You adapted to new norms, succeeded in unprecedented times, and helped provide relief for countless Americans. Your work made an enormous difference.
Navigating the end of emergency measures
Last week, I presented with Ryan McArton on a webinar attended by over 2,200 benefits professionals—Everything old is new again: How to navigate the end of COVID-19 benefits regulations. We covered:
COBRA deadlines, including election and premium payments
HIPAA special enrollment rights
Deadlines for filing benefits claims and for appealing an adverse benefit determination or requesting an external review, including those deadlines related to reimbursement accounts
COVID-19 diagnostic testing and vaccine coverage
Thank you for attending and for asking important questions about what the end of the Outbreak Period means for your work. Our team sifted through all your questions and provided answers to the 10 most frequently received audience questions. I hope this information will provide you with the knowledge and resources you need to prepare for the post-pandemic transition.
1. Are we required to notify members, participants, and qualified beneficiaries about the end of the Outbreak Period?
As the Outbreak Period plan deadline relief comes to a close, employers should review their general and COBRA election notices, summary plan descriptions, and any other notices. And—if these had been previously amended to include language addressing any ERISA plan deadlines that have been suspended/extended—make necessary revisions to remove these references.
Current guidance doesn’t impose any specific notice requirements, but employers could consider sending notices to individuals advising that the extensions are ending as of July 10, 2023. And you can inform your people about any applicable deadlines with respect to COBRA (e.g., to make a COBRA election or to make initial/monthly COBRA premium payments); to request HIPAA special enrollment; and to file claims, appeals, and make requests for external review.
For our part, HealthEquity included, for the duration of the Outbreak Period, a dedicated insert with certain member communications summarizing these extended deadlines. Most recently, we revised the insert to explain that the end of the Outbreak Period is coming as of July 10, 2023, and pre-pandemic plan deadlines will commence as of July 11, 2023.
2. Do the Outbreak Period extensions that apply to Health Flexible Spending Accounts (FSAs) (such as the delay of when a plan year’s run-out period commences) apply to Dependent Care Flexible Spending Accounts as well?
These extensions do not apply to expense reimbursement requests under a non-group health plan such as a Dependent Care FSA (DCFSA) as DCFSAs do not provide medical care and are not subject to ERISA. However, these deadlines can be extended prospectively at the discretion of the employer.
3. Are health plans defined as medical plans only or are dental and vision plans defined as health plans also part of the COBRA extensions?
Under ERISA, a group health plan provides “medical care” as defined in Internal Revenue Code § 213(d) to participants or beneficiaries. The term “medical care” includes the diagnosis, cure, mitigation, treatment, or prevention of disease and any other undertaking affecting any structure or function of the body. Group dental and vision plans provide healthcare according to this definition and are therefore “health plans” for purposes of these Outbreak Period COBRA extensions.
4. How do these updates relate to run-out period deadlines?
The Outbreak Period rules extending certain ERISA plan deadlines apply to, in part, the date by which individuals may file a benefit claim under a plan’s generally applicable claims procedures. Therefore, the deadline for filing benefit claims is suspended until the earlier of (a) one year from the original deadline for that individual, or (b) July 10, 2023. So, for a 2022 calendar-year health FSA, the 90-day run-out period will not begin until July 11, 2023, and will end on October 8, 2023 (i.e., 90 days after July 10, 2023). Note that the Outbreak Period relief does not extend the dates during which a health FSA claim can be incurred, only the date by which the claims can be submitted for reimbursement.
5. Could someone make the election for COBRA coverage at the latest deadline, but only for a few months’ coverage after the qualifying event? For example, if the individual were terminating employment July 2022, electing coverage in 2023, but only paying through October 2022? Or would they be required to pay through the election?
The IRS COBRA regulations specify that an initial COBRA premium payment cannot be required before the end of the 45-day grace period “for any period of COBRA continuation coverage.” [26 CFR § 54.4980B-8, Q&A-5(b)] Furthermore, plans are permitted to apply this initial payment for COBRA continuation coverage to the period of coverage beginning immediately after the date on which coverage under the plan would have been lost due to the COBRA qualifying event. [26 CFR § 54.4980B-8, Q&A-4]
In other words, a qualified beneficiary electing COBRA coverage can’t require the initial premium payment to be applied prospectively from the date that payment is made. And since the IRS COBRA regulations also require plans to allow COBRA premium payments to be made in monthly installments, a plan can require the initial premium payment to cover the period through the end of the month preceding the month in which the initial premium payment deadline falls (with the 30-day grace period applicable for the following month’s payment) in order for the COBRA qualified beneficiary’s coverage to remain active.
If an initial premium payment is not made in full by the end of the applicable grace period (for example, if only the premiums for coverage in months of August 2022 through October 2022 are paid), the IRS COBRA regulations do not clearly address whether the group health plan would be entitled to refund to the qualified beneficiary the amounts that were paid (e.g., August 2022 through October 2022). The health plan could then terminate COBRA coverage retroactive to the date that coverage would have ended if COBRA had not been elected at all or if the qualified beneficiary – having paid a portion of the total initial COBRA premium amount – is entitled to receive COBRA coverage for the periods for which they did pay and then ending effective the first of the following month for nonpayment of premiums (e.g., COBRA coverage effective August 2022 through October 2022 and then terminated as of November 1, 2022).
However, since there is a clear requirement for plans to allow COBRA premiums to be made in monthly installments, the more cautious approach would seem for the plan to allow COBRA coverage to be put into effect for the coverage periods for which timely COBRA premium payments were received and then cancel for nonpayment effective as of the first of the month for which timely payment was not received by the end of the applicable deadline.
6. If COBRA benefits were elected by an employee but not used, and the employee was later terminated from COBRA coverage because payments weren’t made, are they still impacted by these extensions?
The timeframe to make COBRA premium payments was extended until the earlier of (1) one year after the date the COBRA qualified beneficiary was first eligible for relief; or (2) the July 10, 2023, end date for the Outbreak Period. If an individual’s COBRA coverage has already terminated due to nonpayment of premiums (that is, because they have already received the full year and 30 days from that coverage period’s due date), then their COBRA coverage has terminated, and they are no longer COBRA qualified beneficiaries.
7. How do these extensions apply to employees terminated mid-2023 coverage?
The tolling period for events occurring on or after July 11, 2022, and before July 11, 2023, will universally end as of July 10, 2023. For this later group, July 11, 2023, will generally be “Day 1” for purposes of starting the clock on the applicable time period.
So, for example, if an individual was terminated from employment on June 30, 2023, and provided a COBRA election notice on July 1, 2023, that individual’s 60-day election period will not commence until after July 10, 2023. In this example, that individual would have until September 8, 2023 (that is, 60 days beginning July 11, 2023) to make a timely COBRA election.
8. Are COVID-19 tests and treatment supplies considered to be eligible expenses under FSAs?
The cost for diagnosing COVID-19 through home testing is an eligible medical expense that may be paid or reimbursed under health FSAs, Health Savings Accounts (HSAs), and Health Reimbursement Arrangements (HRAs). In the case of health FSAs and HRAs, the plan document must permit thereimbursement.
Plans with provisions allowing reimbursement of any expense that qualifies as a medical expense under the Internal Revenue Code and applicable regulations will automatically permit reimbursement of home COVID-19 tests. However, plan sponsors are encouraged to review their plan documents to determine if additional plan amendments are needed if they wish to permit such reimbursements.
It is noteworthy that, for an over-the-counter (OTC) COVID-19 diagnostic test to be eligible for reimbursement under a health FSA, HSA, or HRA, the expense cannot be reimbursed from other health coverage.
9. How are these suspended deadlines that are resuming at the end of the Outbreak Period calculated?
Remember that the Outbreak Period rules suspended certain ERISA plan deadlines:
• the 30-day period (or 60-day period, in some cases) to request HIPAA special enrollment following birth, adoption, or placement for adoption of a child; marriage; loss of other health coverage; or eligibility for a state premium assistance subsidy;
• the 60-day deadline by which individuals must notify a plan of a COBRA qualifying event or determination of disability;
• the 60-day deadline in which to elect COBRA coverage;
• the 45-day deadline by which to make the initial COBRA premium payment and the 30-day deadline by which to make subsequent monthly payments;
• the date by which individuals may file a benefit claim under a plan’s claims procedure (applicable to both health and welfare plans and retirement plans covered by ERISA or the Internal Revenue Code [the “Code”]);
• the date by which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure (applicable to both health and welfare plans and retirement plans covered by ERISA or the Code);
• the date by which claimants may file a request for an external review after receipt of certain group health plan adverse benefit determinations or final internal adverse benefit determinations;
• the date by which a claimant may file information to perfect a request for external review upon a finding that the request was not complete; and
• the 44-day deadline by which an employer and plan administration must furnish COBRA election notices.
For any of these events whose plan deadlines would have commenced on or before July 10, 2022, the deadline for these will commence one year following the date of the event. For events occurring on or after July 11, 2022, and before July 11, 2023, the Outbreak Period will end as of July 10, 2023. In these cases, you would count July 11, 2023, as the first day of the plan deadline period. So, for example, for a COBRA premium payment with a due date on or after July 11, 2022, you would begin counting the 30-day period starting on July 11, 2023 (Day 1). The end of that 30-day period would be August 9, 2023.
10. The information is all very helpful, but I have very specific questions related to the end of the COVID-19 mandates. How can I get answers to my questions?
During the webinar, our team received 119 questions and we answered as many as we could in the time allotted. The questions and answers above covered most of the topics of concern. That said, several of you asked questions related to your unique situation. For those of you who have specific questions, here are resources to help you get the information you need to be prepared for the transition.
• If you’re a HealthEquity client, reach out to your account representatives
• Members can ask questions directly in the HealthEquity member portal
• Reference our latest compliance alert
• Read through and share the member fact sheets in English and Spanish from the Center for Medicare and Medicaid Services on coverage for COVID-19 tests
• Review the information from the DOL in their recent blog post, What Does the End of the COVID-19 Public Health Emergency Mean for Health Benefits?
• Refer to KFF’s resource on key dates, Timeline of End Dates for Key Health-Related Flexibilities Provided Through COVID-19 Emergency Declarations, Legislation, and Administrative Actions
Resources to resume business as usual
Understandably, the expiration of the emergency provisions related to COVID-19 brought up many questions. Read through the answers above to find out the details that apply to your circumstances. In addition, you can register to watch the webinar replay and reference other helpful documents:
What you need to know about the upcoming COVID-19 National Emergency expiration on February 3, 2023
Unwinding of COVID-19 plan deadline relief: New federal guidance and a potential earlier end? on April 7, 2023
Timeframe set for expiration of COVID-19 emergency measures on April 13, 2023
While most of the answers are known, there are still a few areas of uncertainty that have yet to be addressed in published guidance. The HealthEquity Compliance team is committed to providing the most up-to-date information and resources to help ensure you’re prepared for when the pre-pandemic plan deadlines return in July 2023. Be sure to stay tuned for further updates. In the meantime, you can contact your HealthEquity account representatives for any additional information or clarification you may need concerning your specific health plan needs.
As always, we strongly encourage employers and plan sponsors to consult competent legal or benefits counsel for all guidance on how the actions apply in their circumstances.
Nothing in this communication is intended as legal, tax, financial or medical advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situations. Readers of this content should consult qualified legal benefits counsel or tax professionals for advice with respect to their circumstances.
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