Employer group health plans need to look at their benefits before the Covid-19 public health emergency ends May 11 and prepare for changes affecting coverage of over-the-counter tests, telehealth, and health savings accounts, health plan consultants say.
One of the biggest changes is that they won’t be required to pay for Covid tests without requiring cost-sharing by beneficiaries. However, most will probably continue to cover them with more restrictions.
Health plans may continue covering Covid tests given in doctors’ offices as part of regular medical coverage, such as for strep throat or flu tests, Kathryn Bakich, national health compliance practice leader and senior vice president at employee benefits consulting firm Segal, said in an interview. However, “the utilization is declining as Covid declines” for over-the-counter tests, she said. Health plan beneficiaries also may have access to Covid tests through local governments or other sources, she said.
The Biden administration said it would end the public health emergency May 11. Though many changes affect Medicare, employers also need to take note of the changes. Most had to change their policies during the emergency, and unwinding it means close attention to what they cover now and what they may want to continue.
Employer plans are still expected to cover Covid testing, but they may modify their coverage to match normal medical coverage of in-network services, which would include cost-sharing by beneficiaries, Wade Symons, leader of employee benefit consulting firm Mercer’s Regulatory Resource Group and a partner at Mercer Health, said in an interview. They are “making decisions about what they’re going to do from a plan design perspective related to those benefits that they are no longer required to cover,” which is primarily Covid testing, he said.
Employer plans may choose to restrict access to Covid testing because “there’s been some accusations of price gouging for Covid testing in the marketplace on an out-of-network basis,” Symons said. “Plans do have some incentive from a cost-control perspective to try to narrow that down.”
People with private insurance and Medicare Advantage plans will no longer be guaranteed free over-the-counter at-home tests when the public health emergency ends. But some insurers may continue to cover them voluntarily, according to the Kaiser Family Foundation. The tests may be more costly for people with insurance, KFF said.
PBMs Looking at Recommendations
Group health plans contract with pharmacy benefit managers (PBMs), which have been handling coverage of the over-the-counter tests. PBMs are still looking at what they will recommend for coverage, Bakich said.
The public health emergency doesn’t affect coverage of Covid vaccines. Most group plans are required to cover those as preventive services within their networks under the Affordable Care Act, Bakich said. They don’t have to be covered on an out-of-network basis, she said.
But the government has been covering the cost of Covid vaccines with group health plans paying the administrative costs. The government is expected to run out of money for the vaccines in the first quarter, Bakich said. That means plans have to pay for the cost of the vaccines themselves and the administration costs, and it isn’t clear how much that will cost, Bakich said.
Vaccine manufacturers Pfizer and Moderna have signaled they are likely to raise commercial prices three to four times the federal price for the bivalent booster—to $110-$130 for Pfizer and to $82-$100 per dose for Moderna, KFF reported. Total costs to the commercial sector could range from $6.2 billion to $29.7 billion, depending on how many people get vaccinated, Kaiser estimated.
Covid treatments, such as Paxlovid, also have been covered by the federal government, and funding is expected to run out this year, Bakich said. Plans will likely cover the treatment, she said. “They’re going to have to pay for the whole thing.”
But the Department of Health and Human Services said in a fact sheet released Feb. 9 that “Access to COVID-19 vaccinations and certain treatments, such as Paxlovid and Labevrio, will generally not be affected.”
Partners “across the U.S. Government (USG) are developing plans to ensure a smooth transition for the provision of COVID-19 vaccines and treatments as part of the traditional health care marketplace and are committed to executing this transition in a thoughtful, well-coordinated manner,” it said.
Employers also have questions about the transition from the government to the commercial market to pay for Covid vaccines and treatments, Ilyse Schuman, senior vice president for health policy at the American Benefits Council, said in an interview
They “want to understand exactly what the transition to the commercial market is going to mean,” including “the vision for Covid vaccines going forward,” she said.
The private sector will be taking over the role of negotiating and paying for the vaccines and treatments, Schuman said. “They want to make sure that this is not a disruptive process.”
The American Benefits Council plans to ask government agencies to clarify what the end of the public health emergency means for overlapping requirements for coverage of Covid vaccines, Schuman said. Public health emergency requirements for coverage are different than ACA preventive services requirements for vaccines, without cost-sharing, she said.
Employers also would like guidance from the Internal Revenue Service about pre-deductible coverage for Covid diagnosis and treatments under health savings account-eligible high deductible health plans that was allowed, Schuman said. It isn’t clear when the IRS notice will lapse, “or will they continue,” she said.
In addition to changes in coverage of Covid tests, vaccines, and treatments, health plans face administrative challenges related to the end of the national emergency, Symons said.
On July 10, deadlines that were extended for special enrollment in health plans for events like losing coverage or having children will end, he said.
Plans have to communicate to employees they won’t have extended periods for enrolling in coverage or continuing employer plan coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), he said. That means workers only have 60 days to decide whether to elect COBRA instead of the one-year period allowed under the emergency, he said.
Employers also will no longer enjoy relaxed restrictions on telehealth and virtual care under the public health emergency that allowed extension of those services to people not eligible for the major medical plans, such as part-time and temporary staff, Symons said.
Telehealth services were especially popular for behavioral health, he said.
Unless Congress acts, “you would be out of compliance if you were letting your part-timers or others who aren’t eligible for the major medical plan to use that virtual care service.”
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