Yesterday, the federal agencies that have primary oversight over employer sponsored group health plans published a joint directive that impacts most of Admin America’s clients and their benefits advisors. We wanted to send you this brief update to help you better understand how the group health plans you work with are impacted by that directive.
Due to the Covid-19 pandemic, the IRS and U.S. Department of Labor’s Employee Benefits Security Administration have temporarily suspended several plan related deadlines that might otherwise jeopardize an individual’s eligibility for coverage or their ability to file claims. This will provide an extension of time for Plan Participants and Plan Sponsors to meet certain relevant deadlines. These extensions are mandatory for all impacted plans.
Of the types of deadlines listed below, those that are impacted by this new guidance are those that would have otherwise occurred on or after March 1, 2020. The impacted deadlines include:
the time periods individuals have to enroll in group health coverage pursuant to a HIPAA special enrollment right (such as loss of group health plan coverage sponsored by another employer or a life event such as a marriage, birth of a baby or an adoption);
the amount of time a Plan Participant has to submit claims for benefits (this provision is of particular importance to FSA and HRA plans sponsors whose 2019 claims filing deadline was March 31, 2020);
the amount of time a Plan Participant has to file an appeal of any denial of a claim for benefits;
the amount of time a COBRA Qualified Beneficiary has to elect COBRA continuation coverage or to make payments for the cost of continuation coverage; and
the amount of time a Group Health Plan has to send a Qualified Beneficiary of their rights under COBRA.
The impacted deadlines are suspended until at least 60 days after the declared National Emergency related to the Covid-19 pandemic is cancelled. Admin America will be sending out additional communications in the coming weeks to impacted clients regarding our procedural responses to this guidance. In the interim, impacted FSA and HRA plan sponsors may want to notify their Plan Participants of the opportunity to re-file any claims that were denied last month because they had been submitted after a March or April deadline.
If you would like to review the actual release, it can be found online here.
If you have any immediate questions about this information, please call Admin America, Inc at 770-992-5959 or 1-800-366-2961.
The federal government has responded to the coronavirus pandemic with numerous legislative and regulatory changes to help Americans deal with the health and economic challenges we are going through this Spring. Included along with the stimulus checks, loan packages and enhanced unemployment benefits are other provisions that, while smaller in impact, should prove beneficial to families covered by account based health reimbursement plans.
One of these changes that will impact the largest number of plan participants is the permanent repeal of the requirement for a prescription issued by a physician in order for Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs) to reimburse the cost of over-the-counter medications. This repeal was an element of the CARES Act signed by President Trump on Friday, March 27 but is retroactive to January 1 of this year for all plans. In addition, the CARES Act also authorized, for the first time, all three types of account based plans to reimburse feminine hygiene products.
Account based plans no longer being subject to the over-the-counter medications prescription requirement raises two issues that plan participants should keep in mind. First, participants utilizing plan issued electronic payment cards to purchase over-the-counter medications may experience denials at the point of sale in the near term future. Many retailers utilize an automated database system to screen individual products for eligibility for payment with the specialized electronic payment cards issued by account based plans. It may take several months for some retailers to update their databases with the thousands of newly eligible products.
The second issue participants need to remember is that over-the-counter medications remain subject to the general rules account based plans must apply in determining reimbursement eligibility. For example, plans are not authorized to reimburse expenses which are primarily for general wellness as opposed to a specific medical condition. This means that purchases of vitamins and supplements will typically require additional documentation from a health care provider regarding the specific medical condition for which they are being purchased.
The remaining account based plan related changes described below are more specific to HSAs and the High Deductible Health Plans (HDHPs) that individuals are required to have coverage under in order to make HSA contributions.
In order to increase access to health care for individuals covered under HDHP plans, the CARES Act included a provision that allows for first dollar coverage of telehealth services (i.e., participants are not required to meet the HDHP’s annual deductible before receiving benefits for telehealth services). Ordinarily, if an HDHP provided first dollar coverage for telehealth services, individuals covered under the plan would not be eligible to make contributions to their HSA for any month such coverage was in place. This temporary exemption added to the CARES Act waives that restriction. The temporary provision is in effect from March 27, 2020 until December 31, 2021.
Another waiver of the general rule against first dollar HDHP coverage was issued by the IRS to allow plans to cover all COVID-19 related testing and treatment prior to the covered individual meeting their annual deductible. This waiver does not compel plans on their own to provide this coverage although other newly enacted federal laws such as the Families First Coronavirus Response Act (the FFCRA) generally mandate COVID-19 related coverage (but that’s a topic for another post).
Lastly, as part of the IRS’s extension of the 2019 tax year return filing deadline from April 15 until July 15, 2020, other deadlines linked to the return filing deadline were also impacted. These included the deadline for individuals to make 2019 tax year HSA contributions and to take curative distributions in the event they had contributed too much to their accounts in 2019.
If you have any questions about any of these changes, please e-mail firstname.lastname@example.org or call 800-366-2961, Monday through Friday 8:30 a.m. to 5:00 p.m.
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