The Families First Coronavirus Response Act (the “FFCRA”) was passed into law on March 18, 2020. Soon thereafter (on March 27, 2020), the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted. The laws are designed to provide economic relief to individuals and businesses adversely affected by the COVID-19 pandemic. Toward this end, the laws include a number of provisions dealing with employer-sponsored group health plans. These provisions are discussed below.

Coverage of COVID-19 Testing

The FFCRA requires group health plans to provide coverage, and not impose any cost-sharing requirements (i.e., deductibles, copays, or coinsurance), prior authorization, or other medical management requirements, for:

  1. COVID-19 diagnostic testing products; and
  2. Services and item furnished to an individual during health care provider visits (including telehealth visits), urgent care center visits, and emergency room visits, but only to the extent that such services or items relate to the COVID-19 diagnostic testing or to the evaluation of the individual’s need for COVID-19 diagnostic testing. There is no requirement under these provision to cover the costs of the actual treatment for COVID-19.

The CARES Act expanded the types of tests to be covered without cost-sharing to include diagnostic tests (i) that have been approved under applicable law, (ii) for which the developer has requested, or intends to request, emergency use authorization from the Food and Drug Administration (“FDA”), (iii) that have been developed in, and authorized, by a state (subject to notice to the Department of Health and Human Services (“HHS”)), or (iv) that the HHS has deemed to be appropriate.

In addition, the CARES Act dictates the reimbursement rates for which group health plans must pay for these tests.

  • If the plan had a negotiated rate with a provider as of March 12, 2020 (the day preceding the date the COVID-19 public health emergency was declared), then that rate must continue to apply throughout the duration of the public health emergency.
  • If there was no existing negotiated rate in effect on March 12, 2020, then the plan must pay the health care provider’s cash price, as listed by the provider on a public website, or a lower negotiated cash price. Providers are required to disclose the cash price for the diagnostic tests on a public internet website.

Rapid Coverage of Preventive Services and Vaccines for COVID-19

Group health plans must now cover, without any cost-sharing, any “qualifying coronavirus preventive service.” These services are defined as an item, service, or immunization that is intended to prevent or mitigate the COVID-19 disease, and that is:

  • an evidenced-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.

Although not expressly stated in the new law, it is presumed that the first-dollar coverage for these preventive services are required only for in-network services, as is the case generally for preventive services under the Affordable Care Act.

Optional Temporary Exemption for Telehealth Services

The CARES Act provides that, for a temporary period, a plan will not fail to be treated as a high deductible health plan (“HDHP”) by reason of not imposing a deductible for telehealth and other remote care services. Consequently, an HDHP can waive the deductible for telehealth and remote care services for any medical care (not merely medical care related to COVID-19) without voiding the plan’s Health Savings Account (“HSA”) eligible status.

This provision is optional; it is not required. It is effective as of March 27, 2020, and will remain available through plan years that begin before January 1, 2022 (i.e., for the 2020 and 2021 plan years). The adoption of the temporary exemption requires a plan amendment.

Permitted Reimbursement of OTC Medical Products and Menstrual Care Products

Health flexible spending accounts (“Health FSAs”), health reimbursement arrangements (“HRAs”), and Health Savings Accounts (“HSAs”) may now reimburse expenses for:

  • Over-the-counter (OTC) medical products; and
  • Menstrual care products.

The relaxation of the reimbursement restrictions applies to expenses incurred on or after January 1, 2020. This is an optional provision. A plan amendment is required to adopt the new standards.

Plan Amendments and Notice to Employees

Under federal law, group health plans must be administered in accordance with their terms. As such, plan documents will need to be amended to address these new legal rules. In addition, covered employees should be provided written notice of the changes.

Please visit our COVID-19 resource page to view related articles and videos.


Walter Miller, a Shareholder and employment attorney, is a member of Schwabe’s Healthcare and Life Sciences and Manufacturing, Distribution and Retail industry groups. He has more than 35 years of experiences helping businesses understand complex matters.

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