Executive Summary

President Biden has announced his Administration’s intent to end the two key Covid emergency periods that have been in effect since early 2020.  The emergency periods will end as of May 11, 2023.

The end of the emergency periods will affect employer-sponsored group health plans primarily in two ways:

1. May 11, 2023: The end of the free Covid testing/vaccine mandate; and

2. July 10, 2023: The end of the Outbreak Period extensions for several key health plan deadlines.

The Covid Emergency Periods Ending May 11, 2023

There are two main Covid emergency periods related to the pandemic:

• The National Emergency; and

• The Public Health Emergency.

That National Emergency was initially declared by President Trump in March 2020, and was subsequently extended by President Biden.  The emergency was invoked as a nationwide emergency determination under the Stafford Act in combination with FEMA issuing emergency declarations for every state, territory, and possession in the U.S.  Collectively, this is referred to as the “National Emergency”.  Prior to the Biden Administration’s announced intent to end all such emergency periods as of May 11, 2023, the National Emergency period was scheduled to end as of March 1, 2023.

The Public Health Emergency (PHE) is determined by the Secretary of HHS.  The Secretary originally established the PHE under the Trump Administration in January 2020.  The PHE has been extended multiple times in 90-day increments, most recently on January 11, 2023.  Prior to the Biden Administration’s announced intent to end all such emergency periods as of May 11, 2023, the PHE was scheduled to end as of April 11, 2023.

In response to proposed legislation in the U.S. House to terminate both emergency periods, Biden’s OMB issued a Statement of Administrative Policy as of January 30, 2023 announcing the Administration’s plan to extend both periods to May 11, 2023, and then end both emergency periods on that date.

• Full details: Biden Administration Statement of Administrative Policy

The result is that both the National Emergency and the Public Health Emergency are scheduled to expire as of May 11, 2023.

There are two main ways the end of both Covid emergency periods affects group health plans:

Group Health Plan Effect #1: End of Free Covid Testing/Vaccine Mandate as of May 11, 2023

The FFCRA required that all employer-sponsored group health plans—including fully insured, self-insured, and grandfathered plans—cover COVID-19 testing expenses without any cost sharing during the Public Health Emergency (PHE).  The mandate applied to diagnostic testing, including the cost of a provider, urgent care center, and emergency room visits to receive testing.

This meant that no group health plan could impose any deductibles, copays, coinsurance, or any other form of out-of-pocket expense for any covered individual who receives COVID-19 testing during the PHE. 

The CARES Act expanded on the types of testing that plans must cover without cost-sharing to include free coverage of preventive services and vaccines, including out-of-network providers.  As of January 15, 2022, the mandate was expanded again for the remainder of the PHE to include over-the-counter (OTC) Covid tests.  The expansion permitted covered individuals to obtain up to 8 OTC Covid tests per month from the health plan without charge.

With the end of the PHE on May 11, 2023, these free coverage mandates will no longer apply. 

Note: Non-grandfathered health plans will still be required to cover in-network Covid vaccines without cost-sharing as part of the ACA preventive services mandate that applies indefinitely for in-network immunizations.  As of May 11, 2023, such plans will no longer be required to cover out-of-network Covid vaccines without cost-sharing.

For more details:

• Newfront Office Hours Webinar: 2022 Year in Review

• FFCRA Free Covid-19 Testing Coverage Mandate

• How the CARES Act Affects Employee Benefits

• Health Plans Must Cover OTC Covid Tests Without Cost-Sharing

Group Health Plan Effect #2: End of Outbreak Period as of July 10, 2023

The Outbreak Period rules originally came from the Joint Notice issued May 2020 in response to President Trump’s March 13, 2020 Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, and by separate letter a determination invoking a nationwide national emergency determination under Stafford Act beginning March 1, 2020 as a result of the COVID-19 outbreak (collectively, the “National Emergency”).  FEMA also issued emergency declarations for every state, territory, and possession in the U.S as a result of the pandemic.

In light of the National Emergency, the Departments stated that employers, employees, and dependents may have difficulty meeting standard timeframes with respect to HIPAA, COBRA, and ERISA.  The Outbreak Period rules extended certain of those timeframes to assist employers and employees in the process of maintaining employer-sponsored group health plan coverage.

As the National Emergency continued to remain in effect for an prolonged period, the Departments issued EBSA Disaster Relief Notice 2021-01 clarifying the one-year maximum duration of the Outbreak Period for each applicable event.  Under that updated guidance, the maximum period that must be disregarded during the Outbreak Period is the earlier of:

• One year from the date the individual was first eligible for relief under the Outbreak Period; or

• 60 days from the announced end of the National Emergency (the end of the Outbreak Period).

The Outbreak Period extensions apply for the period from March 1, 2020 until 60 days after the announced end of the National Emergency period.  With the  Biden Administration’s announced intent to end the National Emergency period as of May 11, 2023, the Outbreak Period extensions will end as of July 10, 2023.

Bottom Line: Health plans will stop disregarding the Outbreak Period from the applicable ERISA, COBRA, and HIPAA timeline calculations as of July 10, 2023.

For more details:

• Newfront Office Hours Webinar: 2022 Year in Review

• Major Employee Benefits Timeframe Extensions Announced for National Emergency

• Departments Cap Outbreak Period Extensions at One Year Per Event

Examples of End of Outbreak Period Extensions (July 10, 2023 End Date)

There are nine main health plan situations where the end of the Outbreak Period extensions apply:

1. The HIPAA Special Enrollment Period

The Outbreak Period rules extended the 30-day and 60-day HIPAA special enrollment timeframes by disregarding the Outbreak Period.

Under HIPAA, employees have a 30-day special enrollment period to request enrollment in the health plan upon experiencing the following special enrollment events:

• Loss of eligibility for group health coverage or individual health insurance coverage;

• Acquisition of a new spouse or dependent by marriage, birth, adoption, or placement for adoption.

Employees have a 60-day special enrollment period to request enrollment in the health plan upon experiencing the following special enrollment events:

• Loss of Medicaid/CHIP eligibility;

• Becoming eligible for a state premium assistance subsidy under Medicaid/CHIP.

For more details:

• HIPAA Special Enrollment Events

• Newfront Section 125 Cafeteria Plan Guide

Example:

• Employee 1 and Employee 2 waived coverage under the health plan.

• On March 31, 2022, Employee 1 loses other health coverage when the spouse terminates employment and would like to enroll himself and the spouse.

• On March 31, 2023, Employee 2 gives birth and would like to enroll herself and her newborn.

Result:

• The standard 30-day special enrollment period is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• Employee 1’s Outbreak Period extension is exhausted by the one-year maximum duration in March 2023, and therefore Employee 1 no longer can enroll following the end of the Outbreak Period.

• Employee 2 has until 30 days after the end of the Outbreak Period (until August 9, 2023) to enroll herself and her child in the plan.

2. The COBRA Election Notice Deadline

The Outbreak Period rules extended the deadline for the plan to provide the COBRA election notice to the qualified beneficiary by disregarding the Outbreak Period.

Under COBRA, employers (group health plans) generally must provide a COBRA election notice to individuals who experience a qualifying event within 44 days from the loss of coverage.

These rules generally provide 30 days for the employer to provide notice to the plan administrator, and 14 days for the plan administrator to provide the election notice to the qualified beneficiary, which the DOL generally enforces as a combined 44-day limit.

For more details:

• Newfront COBRA for Employers Guide

• Failure to Timely Provide the COBRA Election Notice

Example: Employee loses coverage under the employer-sponsored group health plan as a result of termination of employment as of April 1, 2023.

Result:

• The 44-day period to provide the employee with the COBRA election notice is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The plan has until 44 days after the end of the Outbreak Period (by August 23, 2023) to provide the COBRA election notice.

3. The COBRA Election Period

The Outbreak period rules extend the 60-day COBRA election period by disregarding the Outbreak Period.

Under COBRA, employees and dependents who lose active coverage as a result of a qualifying event (e.g., termination of employment, reduction of hours) have 60 days to elect continuation coverage from receiving the COBRA election notice.

For more details:

• Newfront COBRA for Employers Guide

• Late COBRA Election or Payment Exceptions

Example:

• Employee’s hours are reduced causing the employee to lose active coverage under the health plan, which is a COBRA qualifying event.

• Employee receives the COBRA election notice on April 1, 2023.

Result:

• The standard 60-day COBRA election period is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The employee has until 60 days after the end of the Outbreak Period (until September 8, 2023) to elect COBRA.

4. The COBRA Premium Payment Period

The Outbreak Period rules extend the 45-day initial premium payment and 30-day grace period for subsequent premium payment timeframes by disregarding the Outbreak Period.

Under COBRA, qualified beneficiaries have 45 days from the COBRA election to make the first premium payment, and subsequent monthly payments must be made by the end of the 30-day grace period that starts at the beginning of each coverage month.

For more details:

• Newfront COBRA for Employers Guide

• Late COBRA Election or Payment Exceptions

Example: Employee is a COBRA qualified beneficiary who fails to make timely COBRA premium payments by the end of the 30-day grace period for March, April, and May 2023.

Result:

• The standard 30-day COBRA premium payment grace period is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The employee has until 30 days after the end of the Outbreak Period (until August 9, 2023) to make the COBRA premium payment for the months of March, April, and May.

5. COBRA Notices from Employees re Divorce/Legal Separation, Child Reaching Age 26, and Disability

The Outbreak Period rules extend the 60-day employee COBRA notification timeframes by disregarding the Outbreak Period.

Under COBRA, the employee or dependent is responsible for notifying the plan within 60 days of the following qualifying events:

• A divorce or legal separation causing the spouse to lose plan eligibility; or

• A child losing eligible dependent status (typically upon reaching age 26).

For a COBRA qualified beneficiary to qualify for a disability extension of the maximum coverage period from 18 to 29 months, the qualified beneficiary must (among additional requirements) notify the plan within 60 days of the SSA disability determination.

Failure to timely notify the plan of these events can cause the employee or dependent to lose COBRA rights under the plan.

For more details:

• Newfront COBRA for Employers Guide

• Late COBRA Divorce/Legal Separation Notifications

• The COBRA Disability Extension

• The ACA Age 26 Mandate

Example:

• Employee and spouse are covered under the employer-sponsored group health plan.

• Employee and spouse finalize their divorce effective April 1, 2023, causing the spouse to lose eligibility for coverage.

Result:

• The 60-day period for the employee/spouse to notify the plan of the divorce to preserve the former spouse’s COBRA rights is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The employee/spouse would have until 60 days after the end of the Outbreak Period (until September 8, 2023) to notify the plan of the divorce qualifying event and preserve COBRA rights for the former spouse.

6. The ERISA Plan’s Benefit Claim Filing Deadline

The Outbreak Period rules extend the plan’s deadline to file a benefit claim under an ERISA plan’s claims procedures by disregarding the Outbreak Period. 

Note that the Outbreak Period applies to the health FSA run-out period (ERISA plan) but not the dependent care FSA run-out period (non-ERISA plan).

Example: Employee was enrolled in the health FSA for the 2022 calendar plan year, which by its terms requires that benefit claims be submitted within 90 days of the end of the plan year.

Result:

• The health FSA’s 90-day run-out period is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The employee’s last day to file the health FSA claim is 90 days after the end of the Outbreak Period (by October 8, 2023).

For more details: Newfront Section 125 Cafeteria Plan Guide.

7. The ERISA Adverse Benefit Determination Appeal Deadline

The Outbreak Period rules extend the claimant’s deadline to file an appeal of the plan’s adverse benefit determination by disregarding the Outbreak Period.

ERISA sets forth a complex scheme of specific deadlines for appeals in its claims and appeals procedures rules.  Among these deadlines is the 180-day timeframe to appeal an adverse benefit determination under a group health plan or disability plan, and the 60-day timeframe to appeal an adverse benefit determination under any other type of plan.

Example: Employee receives notification of an adverse benefit determination from the employer-sponsored disability plan on January 28, 2023.

Result:

• The 180-day period for the employee to file an appeal of the adverse benefit determination is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• Therefore, the employee’s last day to submit an appeal is 180 days after July 10, 2023, which is January 6, 2024.

For more details: Newfront ERISA for Employers Guide.

8. The ERISA External Review Request Deadline

The Outbreak Period rules extend the claimant’s deadline to file an external review request by disregarding the Outbreak Period.

Under the ERISA appeals procedures for non-grandfathered health plans, claimants have four months after the date of receipt of an adverse benefit determination or final adverse benefit determination to request an external review if the claim involves medical judgment or rescission of coverage.

Example: Employee receives an adverse benefit determination involving medical judgment from the employer-sponsored group health plan on April 1, 2023.

Result:

• The four-month period for the employee to file an external review request is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The employee will have until four months from the end of the Outbreak Period (by November 10, 2023) to file the external review request.

For more details: Newfront ERISA for Employers Guide.

9. The Deadline to Submit Additional Information Related to External Review Request

The Outbreak Period rules extend the period to submit additional information related to the external review request by disregarding the Outbreak Period.

Upon a finding that a claimant’s external review request was not complete, the claimant has until the end of the four-month filing period (or, if later, 48 hours following receipt of notification of an incomplete request) to perfect the request for external review by submitting additional information.

Example:

• Employee receives an adverse benefit determination involving medical judgment from the employer-sponsored group health plan on April 1, 2023.

• Employee submits request for external review on April 15, 2023.

• On April 20, 2023, the plan notifies the employee that after completion of the preliminary review of the request, the plan has determined that the request is not complete.

Result:

• The four-month period (or, if later, 48-hour period) for the employee to perfect an external review request by submitting additional information is extended by disregarding the Outbreak Period.

• The National Emergency ends May 11, 2023, and therefore the Outbreak Period ends July 10, 2023.

• The employee will have until four months from the end of the Outbreak Period (by November 10, 2023) to perfect the external review request by submitting additional information.

For more details: Newfront ERISA for Employers Guide.

Reminder: HSA Telehealth Relief Not Affected by End of Covid Emergency Periods

The CAA 2023—passed just before the end of 2022—extended for a second time the HSA relief permitting high deductible health plans (“HDHPs”) to provide first-dollar telehealth and other remote care services.  The relief now applies for plan years beginning after December 31, 2022 and before January 1, 2025 (i.e., the 2023 and 2024 plan years for employers with a calendar plan year).  Those telehealth or other remote care services do not need to be preventive or related to Covid to qualify for the relief.

For more details:

• CAA 2023 Includes Two-Year Extension of HSA Telehealth Relief

• Newfront Go All the Way With HSA Guide

Summary

The Covid pandemic emergency periods are finally coming to a close, and with their end comes the conclusion of these key group health plan provisions that have been a staple since the world changed so dramatically in March 2020.  Employers should be aware of these changes taking effect May 11, 2023 and July 10, 2023 to ensure proper plan administration and address questions and concerns from employees who have in many cases become used to these longstanding forms of pandemic-related relief.

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship.  Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).