COVID-19: Summary of Recent Developments Regarding Group Health Plan Coverage and Remote/Telehealth Services


Recent novel coronavirus legislation — the Families First Coronavirus Response Act (“FFCRA”)  and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) — include two provisions impacting employer-provided group health benefits: (1) mandatory “first-dollar” coverage of COVID-19 diagnosis and testing, and (2) permissive “first-dollar” coverage by high deductible group health plans of remote (or telehealth) services. On April 11, 2020, federal regulators published guidance in the form of Frequently Asked Questions (“FAQs”). This Alert provides a brief summary of these two legislative provisions and the agency FAQs.

Mandatory Coverage of COVID-19 Testing

Starting March 18, 2020 and continuing for the duration of the COVID-19 public health emergency, employer-sponsored group health plans must provide coverage for COVID-19 testing subject to a number of terms and conditions:

Recent Changes Concerning High Deductible Health Plans

A High Deductible Health Plan (“HDHP”) is a group health plan that sets specified annual deductible thresholds so that, with certain exceptions (such as preventive care benefits), no benefits are provided until the required annual deductible is satisfied. The design enables an employer and/or its employees to make pre-tax contributions to the employees’ health savings accounts (“HSAs”). Two recent developments expand the universe of expenses that may be covered by the HDHP before the required annual deductible has been satisfied.

First, the CARES Act creates a new exception that allows an HDHP to cover remote (or telehealth) services before the required annual deductible has been satisfied subject to the following terms and conditions.

Second, in Notice 2020-15, the Internal Revenue Service had provided that coverage of COVID-19 testing and treatment is treated as preventive care and can, therefore, be covered by the HDHP before satisfaction of the required annual deductible. So, while first-dollar coverage of COVID-19 diagnosis and testing is required by the CARES Act, Notice 2020-15 makes clear that such coverage will not affect the pre-tax treatment of employee and employer HSA contributions. Also, while the CARES Act does not mandate treatment for COVID-19, Notice 2020-15 makes clear that if an HDHP chooses to cover such treatment prior to satisfaction of the annual deductible, it will not affect the pre-tax treatment of employee and employer HSA contributions.


Copyright 2024 K & L Gates
National Law Review, Volumess X, Number 113