Employee Benefits Newsletter

March 31, 2020

Authored by: Alexis Blair, Cathy Currie, Kirsten Garcia, Jesse Gelsomini, Brian Giovannini, Tyler Hubert, Chris Kang, Charles Plenge, Scott Thompson, Tiffany Walker, and Susan Wetzel

EMPLOYEE BENEFIT/EXECUTIVE COMPENSATION CHANGES MADE BY THE CARES ACT

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). This historic $2 trillion relief package received bipartisan support and is part of the third wave of federal government support as the nation copes with the acute economic fallout from the coronavirus (COVID-19) pandemic. Some of the key provisions of the CARES Act that apply to health and welfare plans, educational assistance programs, retirement plans, executive compensation programs, and employment and payroll taxes are outlined below:

Health and Welfare Plans Q1. What COVID-19 testing and treatment is our company’s employer-sponsored group health plan required to cover?

The Families First Coronavirus Response Act (“FFCRA”) requires an employer-sponsored group health plan (including a grandfathered plan under the Affordable Care Act (“ACA”)) (a “Plan”) to provide coverage for COVID-19 diagnostic testing and services related to the diagnostic testing without any cost sharing (including deductibles, copayments, and coinsurance), prior authorization, or other medical management requirements.

• The CARES Act expands the diagnostic testing that is required to be covered under the FFCRA to include tests that are not approved under the Federal Food, Drug, and Cosmetic Act.

• A Plan must reimburse providers of the diagnostic testing and related services:

o At the negotiated rate, if there was a negotiated rate in effect between the Plan and the provider before the public health emergency was declared; or

o If there is no negotiated rate, in an amount equal to the cash price for such service as listed by the provider on a public internet website, or the Plan can negotiate with the provider for less than such cash price. Providers are required to post the cash price for COVID-19 diagnostic testing on a public internet website.

• The CARES Act requires a Plan to cover a “qualifying coronavirus preventive service” within 15 business days after the date on which a new qualifying coronavirus preventive service recommendation is issued. Employers should note that, generally, a Plan is not required to cover a newly recommended preventive care service until at least a year after it has been issued. In addition, it appears this could apply to a grandfathered plan under the ACA, which is generally not required to cover preventive care services; however, future guidance should clarify this. A ‘‘qualifying coronavirus preventive service’’ means an item, service, or immunization that is intended to prevent or mitigate COVID19 and that is:

o an evidence-based item or service that has in effect a rating of ‘‘A’’ or ‘‘B’’ in the current recommendations of the United States Preventive Services Task Force; or

o an immunization that has in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved.

• Employers should ensure their group health plan documents and summary plan descriptions permit this coverage, paying particular attention to experimental/investigational exclusions, preventive care provisions, and reimbursement provisions.

Read the full article here.