The CARES Act and Your Employee Benefit Plans

The Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law on March 27, 2020. It is a massive bill of over 880 pages intended to help Americans during the COVID-19 (coronavirus) pandemic. It includes a number of provisions that affect your employee benefits plans. We’ve outlined a few of the highlights below.

Over-The-Counter Eligible Expenses

• Participants in healthcare FSAs, certain Health Reimbursement Arrangements (HRAs), and health savings accounts (HSAs) now have the ability to have over-the-counter medications as items eligible for reimbursement without the necessity of a prescription –assuming their employer’s plan documents so allow.
• In addition, expenses for menstrual care products are added to the list of eligible items under an FSA, certain HRAs, and HSAs. Menstrual care products are defined as tampon,pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation. This move puts these health products in line with other already eligible expenses.
• In the case of HRAs, the plan document must allow for the reimbursement of all Internal Revenue Code Section 105(b) medical expenses in order to cover OTC and menstrual care products. Many HRA plans only reimburse deductible or medical coinsurance and/or copay expenses not reimbursed under the integrated group health plan. In those cases, OTC and menstrual care products would not be an eligible reimbursable expense.

Note: Participants will need patience during the roll out of this new law. The SIGIS (Special Interest Group for IIAS Standards) and merchants will be key drivers of this change as SIGIS will have to release an updated list of eligible products and merchants will have to update point of sale systems to implement those changes. Merchants will adhere to their own timelines regarding completion of this process based on their own internal resources. Card processors and Third Party Administrators have no ability to influence this. 

Benefit cards may not work for all eligible purchases and the participant may incur inconsistent shopping experiences until this process by SIGIG and merchants is complete. We expect any issues like this to be temporary and resolved in a fairly short time frame.

These provisions are retroactive to January 1, 2020 (again, if the plan documents so allow) and are considered permanent changes.

Telemedicine

While many employers have utilized telemedicine as a part of their group medical program, either integrated with the group health plan or as a separate benefit, the IRS has up until now not allowed those expenses to be reimbursed under a high-deductible health plan (HDHP) until the plan’s deductible was satisfied.

If a plan did not follow that rule, neither the employer nor employees could make qualified HSA contributions.

The CARES Act gives us a temporary fix to this problem by allowing payments for “telehealth or other remote care services” reimbursed before the HDHP deductible is met without jeopardizing the ability of employers and employees to contribute to their HSAs. This provision is effective immediately but does expire on December 31, 2021. This deadline may be either extended or removed at a later time.

Coronavirus Coverage

Diagnostic Testing:

The CARES Act clarifies that all testing for coronavirus (COVID-19) is to be covered by private insurance plans (fully-insured and self-insured) without cost sharing. Coverage extends to any services or items provided during a medical visit—including an in-person or telehealth visit to a doctor’s office, an urgent care center, or an emergency room—that results in coronavirus testing or screening. This coverage requirement began on March 18 (when Families First Coronavirus Response Act was enacted) and remains in effect only while there is a declared public health emergency (as defined under federal law).

For private health insurance plans, the bill broadens the testing that would be covered without cost-sharing beyond FDA-approved testing to include 1) tests provided by clinical labs on an emergency basis (including public health labs); and 2) state-developed labs.

COVID-19 Preventative Services:

Group health plans and health insurance issuers are required to cover (without cost-sharing to the participant) any “qualifying coronavirus preventive service” as a preventive benefit under the Affordable Care Act (ACA). A “qualifying coronavirus preventive service” is an item, service, or immunization that is intended to prevent or mitigate COVID-19 and is:

• An evidence-based item or service that has in effect a rating of ‘‘A’’ or ‘‘B’’ in the current recommendations of the U.S. Preventive Services Task Force; or
• 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.

Contrary to the current rule under the ACA, which permits a delay in covering certain preventive services or medications, there is an accelerated effective date of 15 days after the date upon which a recommendation is made related to the qualifying coronavirus preventive service for the plan to cover such services or medications.

If you have any questions regarding these changes do not hesitate to reach out to your BenePro Account Manager.