To encourage testing and treatment for the novel coronavirus (COVID-19), insurance regulators in several states have issued guidance to carriers and taken other urgent measures, such as expanding telehealth. According to CMS, COVID-19 testing and treatment are Affordable Care Act (ACA) essential health benefits (EHBs) covered by all state benchmark plans, but cost-sharing and preauthorization requirements can vary. Even before Congress took action, some states started requiring that insurers waive cost sharing for COVID-19 screening, which had raised concerns about potential loss of health savings account (HSA) eligibility for individuals with high-deductible health plans (HDHPs). In response, IRS Notice 2020-15 lets HDHPs cover COVID-19 testing and treatment free of cost, even if individuals have yet to satisfy their deductible. This GRIST provides brief summaries and links to state COVID-19 guidance for insurers, along with related considerations for employers.

COVID-19 issues for health plans

Just-passed federal legislation (HR 6201) requires group health plans and insurers offering group coverage or individual health insurance (including grandfathered plans) to provide COVID-19 testing — including related office, telehealth, urgent care center or emergency room services — without applying any cost-sharing, prior-authorization and other medical-management requirements. However, states have not waited for federal legislation and have issued their own insurance directives that may go beyond the federal cost-sharing ban for COVID-19 testing.

State insurance directives don’t apply to self-insured ERISA plans, but employers should update their health plans to meet the federal cost-sharing ban for COVID-19 testing and communicate that policy as soon as possible to employees. Employers with insured plans should confirm what other COVID-19 services the plan’s carrier will offer without cost sharing. The benefits of providing cost-free COVID-19 treatment and other services, like telemedicine, may outweigh the expense to employer-provided plans.

COVID cost-sharing waivers and HDHPs. State directives to cover the costs of COVID-19 screening or treatment without imposing any deductible had raised concerns about how compliance would affect individuals’ eligibility to make tax-deductible HSA contributions. The Internal Revenue Code allows tax deductions for HSA contributions if made by an individual who meets two conditions:

• Has HDHP coverage that imposes a minimum deductible before paying a portion of benefits, except for preventive care
• Does not have other disqualifying health coverage

IRS Notice 2004-23 provides a safe harbor for HDHPs to cover screening to diagnose certain infectious diseases on a predeductible basis, but coronavirus isn’t on that list. Now, Notice 2020-15 has expanded this cost-sharing relief to include COVID-19 screening, testing and treatment.

Telemedicine questions. First-dollar telemedicine can present similar issues but may qualify as an excepted benefit in certain cases. Industry stakeholders are seeking further clarification on telemedicine.

State-by-state action. Download the 11-page print-friendly PDF for brief summaries and links to state COVID-19 guidance for insurance carriers. Not all states have issued guidance, but more may do so in the near future. The article concludes with some considerations for employers.