Key takeaways from this discussion:
Welcome to today’s edition of Bruce With Bruce. We are joined once again by Ben Conley, partner at Seyfarth Shaw and frequent collaborator. Well, we had a lot to talk about today and there’s a lot after what feels like a few months of no real new developments. We’ve got some new developments that we’re going to dive into:
But first let’s talk about the mid-term elections from an impact perspective for employers and group health plans.
Always love to be invited, Bruce. Thanks for having me.
Yeah. I think it’s going to have a, well, I’m just diving into that topic, right, because there’s a lot here when you look. The Biden administration announced that May 11th, the National State of Emergency and the National Health Emergency will expire.
That carries with it several different impacts that employers have to consider. I tend to focus on some of the administrative components from a group health plan perspective, like:
To pay for COBRA.
To pay for COBRA, right, to pay for COBRA.
While you don’t see a lot of people taking advantage of it, you don’t see people coming in ten months after their COBRA premium was due in saying, “Oh, here’s my payment for last April.” They could technically still do that if they wanted to. Again, while you don’t see it being taken advantage of it in great numbers, it is still a possibility.
We’ve seen a couple of different approaches taken by employers regarding the COBRA extensions:
Both of those different scenarios will be impacted differently by this expiration of the National State of Emergency.
When the relief expires, if an employer had been pending or terminating somebody’s benefits and then reinstating when a payment was made, they’re just not going to be accepting new payments. Right? That’ll be less of an impact.
But for someone who may be an employer that might have extended the grace period and was operating with a 13-month grace period instead of one-month grace period, suddenly they’re going to be retro terminating a lot of people back anywhere from one month to 13 months.
Yeah. And I mean, the COBRA one is so interesting, because insurance is about predictability in the face of uncertainty. Right?
In other words, it would be a much different environment, if for instance when you were buying auto insurance, you could wait to see how many accidents you had over the course of years decide whether to go back and buy insurance to day one.
The COBRA one is so interesting, because insurance is about predictability in the face of uncertainty.
That’s effectively the environment we’ve been in from a COBRA perspective is where there’s really no incentive for an individual to elect COBRA until they’re approaching their deadline, and then it’s a cost-benefit analysis. How much would my premiums have been for the year? How much medical expenses did I incur during the year?
Now, that presumes people were doing that. I don’t think that by and large that’s what’s happening, but certainly could be what happens in specific circumstances where someone finds themselves uninsured or underinsured and then they do have a high-cost medical incident at some point in the year. It could be driven by the individual or it could be driven by the provider where they receive the medical services.
A provider could say to them, “We just treated an uninsured person to the tune of $150,000. They were employed seven months ago. Let’s go back and tell them, well, you can either pay the $150,000 or we’ll pay your COBRA premium for you and get that money and more from your health insurance plan.”
Again, we have not seen those scenarios play out and we are, knock on wood, getting to the tail end of the emergency period. But that is, I think, if it’s going to happen, it has to happen before the period expires, so that could be forthcoming.
Yeah, it’s going to be interesting for employers. Right?
Then I think that as anytime we talk about these various compliance requirements, regulatory changes, guidance changes, et cetera, I always look at what does the communication piece look like.
If you’re an employer, if you’re a group health plan, what do you need to communicate?
Obviously, we’ve seen, and for our clients, I’ve seen situations where clients have modified their COBRA-qualifying event notice or maybe their initial right to notice, their general notice of continuation coverage, to reflect the fact that this relief is in effect.
So, you’ll need to modify one of your standard COBRA qualifying event notices, your COBRA notices in general, to reflect current practices.
Termination notices are another one that I’ve seen modification to to reflect that this relief is in effect. You’ll need to take a look at that work with your COBRA administrator to ensure that those communications are in place. But because this relief extended further, it can impact claims dates.
It can impact anybody, right?
Because think about what this extends to, including the special enrollment elections.
That means that if an individual’s not enrolled in your health plan but had a baby, they had an open-ended right to re-enroll in your health insurance on a retroactive basis, and you really have no way of knowing that that person is out there. Right?
When you think about whether to communicate and how broadly to communicate, I think it’s important to keep in mind the DOL’s perspective on this.
They did in the midst of the pandemic issue some guidance.
Here’s some of the language they used: They said plan administrators should consider affirmatively notifying impacted participants that the relief period is ending and what their specific deadline is, and that plans may need to reissue or amend prior disclosures if they failed to communicate accurately the specific deadline.
Now what does that mean accurately?
If your notice said your deadline will be extended until the earlier of one year after the deadline or 60 days after the end of Public Health Emergency, I mean, that’s what the rule was, but we didn’t know when the Public Health Emergency was going to end. So do you need to communicate and say specifically here is the date, May 11th, and any deadline that arose during the year leading up to that, here’s what that means for that deadline?
I think, and while we certainly haven’t sort of come to a consensus on what the uniform best practice is here, I do think that a lot of employers will be considering sending out a population-wide notice at a minimum to people who are eligible for their health insurance coverage or who are previously eligible for their health insurance coverage communicating the end of this deadline just to cover their bases, because the alternative is someone comes forward and says, “You never told me.” Right?
I do think that a lot of employers will be considering sending out a population-wide notice at a minimum to people who are eligible for their health insurance coverage or who are previously eligible
Right. Well, and all of the various items that you called out are important, right? HIPAA, special enrollment notes, or your special enrolled periods, all of these items are really important.
But there there’s some additional considerations as well. Everybody has been used to, since there have been COVID tests, that COVID tests are available at no cost. Right? Vaccines and boosters have been available at no cost. But with the end of the National Health Emergency and the National State of Emergency, the requirement that they are available at no cost, it goes away. Correct?
Yes. Drilling down on that a little bit, the FFCR and the CARES Act tied to the Public Health Emergency said both testing and office copays or other ancillary cost associated with that testing all has to be covered at no cost, and for vaccines, any approved vaccine had to be covered at no cost, both in network and out of network.
Now, most of that is going away, but for the fact that the USPSTF, which don’t pin me down on what that stands for, has now added the COVID vaccine to the list of ACA-mandated preventive services.
So even post-conclusion of the National Health Emergency, Public Health Emergency, plans will still have to cover in-network COVID vaccines at no cost. But what that takes away is the requirement to cover those out of network at no cost. That’ll be around for a while. What the sort of going forward vaccination schedule will look like is anybody’s guess.
But beyond communications, Bruce, we might be talking about actual plan amendments here that are required if to the extent that you’re plan hardwired in these provisions and either made them open or tied them to an amorphous deadline that is now expiring. It probably merits no participants, but that change is coming
Right. I think it’s a good call out. True, and your in-network versus out-of-network call out for the vaccines and boosters. I think it’s important and it’s something that nobody’s had to consider.
You can hit the pharmacy at the end of your street and go to the one that’s most convenient, not necessarily the one that was in your network. I think these are all things that, again, consumers typically, this is not something they might not be watching, might not be paying attention to. Health plans will want to consider if you’re putting a communication out that’s going to talk about claims deadlines ending, that’s going to talk about COBRA deadlines ending, all of this information you could fold into the same communication component. Right?
That’s right. I think to round out the discussion, Bruce, there are a couple other more nuanced aspects that were tied to the Public Health Emergency that are just worth considering so that we’re being comprehensive on our discussion here.
One is we were all instructed to stay away from each other, and there was a heightened desire by the federal government to make sure people had access to some form of healthcare.
One of the things that they did was to issue a temporary exemption that would allow employers to extend telehealth to people who weren’t eligible for their group health plan, notwithstanding the fact that that was creating an ACA non-compliance group health plan, because obviously telehealth doesn’t have the free preventive, et cetera, the laundry list of things that have to be covered there. That would expire, again, at the end of the Public Health Emergency.
One is we were all instructed to stay away from each other, and there was a heightened desire by the federal government to make sure people had access to some form of healthcare
The government issued an EAP exception that said if you tie COVID vaccination or testing to your EAP, that won’t blow up your EAPs accepted benefit status, which renders it subject to the various ACA mandates through the end of the Public Health Emergency, so that relief would also expire.
The other one that I think is not on a lot of people’s radar, but there was a FAQ issue that said that all plans are required to do mental health parity testing. One of the things that is required in that regard is to compare the treatment limits that apply on the medical side based on the most predominant level of treatment to the treatment limits that apply on the mental health side.
The government said, “Hey, during the emergency period, you can disregard COVID treatment, COVID vaccination, et cetera, on the medical side and look at the health plan otherwise.”
Once the Public Health Emergency expires, those elements will have to factor into that testing, which might mean that you might have even either ignored testing in that regard for the last couple years or tested without regard to that, but now those elements will need to be factored in just to make sure that you’re still complying with the Mental Health Parity Act.
There’s a lot going on. I mean, employers have a lot of items that they need to be taking notes on in this discussion, because there’s quite a bit to consider. We’ve talked about this in the past. In December, we did a compliance webinar. We spoke together. We did Brews with Bruce previously, where we’ve talked about the impending one day the state of emergency is going to end, kind of academic because we didn’t have a real date. Now we have a real date, May 11th.
For some plans, I’m sure it’s going to cross over a plan year, if you’re a seven one plan year, it’s going to add a little bit there.
But there’s a lot here for employers to think about, not just in terms of plan, whether it’s your plan documents or amendments that need to be considered, your communications to your participants, to your covered participants and potentially qualified beneficiaries, where you may have individuals on COBRA that are going to be impacted by this because their payment requirements are changed. Updating a variety of documents. There’s a lot here. Just that employers need to make sure that they’re tracking for.
Bruce, just to drill down on one point there, because I think this is a nuance that’s important to ask, employers start to work through those communications.
Recall that for the deadline extensions, COBRA election, COBRA payment, special enrollment, ERISA claims, ERISA appeals, all of those things were tied to the so-called outbreak period, which was the National Health Emergency plus 60 days. Right?
We talked about May 11th is the day the National Health Emergency will expire. What that means is that the outbreak period expires July 10th, if I’m doing my math right, meaning that that’s the sort of pertinent deadline for communicating these things.
Now, all the other things we talked about, vaccinations, testing, all of those are tied to the Public Health Emergency, which didn’t have the 60-day extension tacked onto the end.
So, if you’re going to communicate everything globally, you’ve got to make sure you’re hitting those staggered expiration dates, unless you want to extend everything through July 10th, that would be fine. But I just want to make sure that we’re capturing what the May 11th date means and what it doesn’t mean.
No, that’s a good call out. It gets complicated when you start thinking about COBRA specifically, right?
Because I know that the way the relief reads that it says that you disregard the relief period for the purposes of determining timeliness. And we should add, all of the different relief we talked about, there’s also relief specific to the group health plan itself and providing COBRA qualifying event notices on a timely manner.
All the relief we’ve spoken about before has been largely participant specific. Right? But let’s not forget there is COBRA relief for employers or for group health plan specific to their provision of the required COBRA qualifying event notices on a timely basis.
That’s exactly right.
That will also be ending. While hopefully nobody’s had to rely on that relief, if you have, please be aware it’s going away July 10th. Right?
But with all of this different relief that’s out there, I think it makes a lot of sense for employers, there’s definitely a need for communication here. I don’t know, there’s a communication to your individual participants:
There’s quite a bit of work that’ll need to be done in advance of May 11th.
But jumping back over to the COBRA relief specifically, the relief period was to be disregarded from a period of timeliness. So, if somebody has, for example, 45 days to make their initial COBRA payment, and it was due, I don’t know, say December 1st, and if the relief period ends July 10th, as I’m thinking this through here, would that individual then get 45 days from July 10th to make their initial COBRA payment?
Yeah. There’s a lot of nuanced questions in terms of how you calculate these dates that I think the DOL may need to flesh out. But the way that I’ve been thinking about it is that it’s tied to the original deadline, not the original event date.
If you had an election that would have to be made within 45 days, then you count from the end of the period, not from the beginning of the period. If you count from the beginning of the period, that’s fine.
The additional 45 days. Right?
Which comes to the same date, if I’m doing my math correctly, but that’s exactly right. And then also recall that there’s a toggle here, right, which means that it’s not globally July 11th for everyone. If someone’s end date or expiration date was more than a year out, than it would be earlier than that. Just think about that, because if you think about, well, we don’t need to get anything out until July 9th, there may be people who have deadlines expiring now.
That’s been happening all along, but to give yourself the most protection from the ability to enforce those deadlines, I think the sooner the better, because once you get this out, you can at least definitively give the outside window now because we know it’s May 11th plus 60 days.
Great. As we said, there’s a lot going on here. This relief in the end of the National State of Emergency, National Health Emergency, carry with it quite a few changes.
I know there are an awful lot of people that are probably going, “Finally,” right? Because originally this relief was very much designed to increase access to healthcare. The intent was give more people time to enroll in COBRA, because we want to make sure, because we didn’t know what was going to happen with COVID. We want to make sure everybody has every opportunity to enroll and have health coverage.
I’ve heard from some employers, I’ve heard from some individuals that have been wanting this to end for a while, and some strictly looking at the administrative headaches associated with some of the relief. I’m sure those individuals will be happy celebrating the fact that the state of emergencies coming to an end.
But definitely there’s some checklist items here that employers need to keep in mind. That need to coordinate with their vendors on whether it’s a COBRA administrator with their health plans, et cetera, to ensure that they’re fully aligned on how COVID tests are going to be handled on a go forward basis.
Editor’s cliff notes:
The other big category, Bruce, that I think a lot of people hadn’t been thinking about, but that certainly applies, health FSA claims submission deadlines. Right? That is a claim deadline that plans apply, that generally, let’s call it 90 days after the end of the plan year, which would be for a calendar year, March 31st, 2023, that deadline is extended because it falls within the National Health Emergency period, but what’ll need be extended from March 31st to July 10th.
It’s worth thinking about that. I know a lot of employers historically have been in the habit of sending out a reminder on let’s say March 15th that says, “Hey, here’s your deadline. You’ve got to get these forms in.”
Then in the last couple years it’s been a little less significant because even if somebody’s late, they can submit it a month, two months, a year later. But now it’s going to be less than.
Again, if you intend to enforce that as an employer, less than a year, it’ll be just a couple more months. I can tell you from having dealt with this situation with a number of plan sponsors, it is much easier to explain to an employee why you are denying their claim for FSA reimbursement if you can point to a specific notice you provided them saying you’re outside deadline this year is July 10th, 2023 for any 2022 claims than if you just have to tie it to an amorphous communication you sent three years ago about extensions generally.
Yes. I always wondered, being so plugged into what’s going on from National State of Emergency, COVID relief, all of that, I’m incredibly aware of all of these dates and pay a lot of attention to this. In my mind I’m like, “Well, everybody should know this,” but I realize, right, I spend 50 hours a week more than most people do watching this.
Absolutely agree. Getting those communications out, identifying the various impacts that will be occurring, the deadlines that we now know. And while many of the communications, including those employers who have previously updated their COBRA communications for example, did indicate that when the relief period ends that, so then will the extensions.
To your point, if that was, say with a COBRA notice 18 months ago or 12 months ago, it’s probably not something that is top of mind for these individuals, so making sure that those are communicated effectively I think is key.
The editor’s cliff notes:
So much going on there. There are other things that I know we could talk about and just want to touch on. I’m going to jump off of the topic of COVID relief, and even end of the national state emergency for a moment.
But we were talking about the midterm elections. I just want to touch briefly before we wrap up on the midterm elections at the state level. We’ve seen a variety of different actions going on. States have had some shifts in their political controls and such. But we’ve also been seeing some actions taken there by a variety of states impacting things like gender-affirming care, reproductive rights.
Before we move away entirely from the topic of midterm elections and that arena, I want to just circle back to this piece and get your thoughts on what you’ve seen there coming out of the midterms.
Yeah, great call out on that one, Bruce. I mean, what we have historically seen is that when Congress is acting or not acting, there is an equal and opposite reaction from states. We saw this post 2016 when Congress rolled back the individual mandate, a number of states that had a health system that was premised on the idea that people were going to be driven into the marketplace decided to pass their own individual mandates to sort of plug that hole, if you will.
Same thing can be expected to happen here. I mean, we’ve already seen it a bit in the reproductive healthcare space, both with respect to travel abortion services, but also with respect to gender-affirming care. That’s playing out on both sides in a variety of states.
But just other things, right? Ever since the Supreme Court’s ruling in the Rutledge versus PCMA case, which dealt with pharmaceutical costs in Arkansas, there has been a sort of eroding away of ERISA preemption, if you will. That case, which was a 9-0 Supreme Court decision, gave a roadmap to states who wanted to circumvent ERISA preemption. If you pass a law and you want to impact self-funded employee benefit plans, here’s how you do it to avoid the preemption argument.
We’re just seeing an uptake there right and left, I mean, immediately with the prescription drugs, but we’re already seeing it in other avenues as well where states are coming in and attempting to reaffirm their marketplace to their ideal of what health insurance should look like. Which don’t get me wrong, some of these things are great, some of them are terrible.
But generally with what you and I do, Bruce, there is a benefit to having a nationwide uniform administrative scheme, which we are just falling further and further behind now. It makes it challenging, especially in the current environment, where your employees may be scattered all over geographic locations that aren’t tied to your office spaces, trying to keep track of which of these laws apply and why.
To give a shameless plug for you, Bruce, you’ve got a unique yet manual way of tracking development, right?
The Businessolver Compliance Inventory, and thanks for the plug there. The Businessolver Compliance Inventory is exactly what it sounds like. It is a laundry list of state, federal, and local legislation that impacts group health plans. I won’t say it’s everything because we all know no one list has everything. But it’s fairly comprehensive. If anybody’s having trouble falling asleep, this might be exactly what they need to help push them over the edge.
But I think that those of us in the benefits community have gotten used to the annual checklist of things we have to do, right? But the list is growing.
I think that you now have to look both at here’s what I have to do from a federal perspective, but here’s where I need to look to see whether I have residents there and make sure that I’m meeting, both within and outside of ERISA. You never had preemption for non-ERISA things, but there are, what, five or six locations now that have transit mandates, that if you have employees in those locations, you have to offer them some form of transit benefits. It’s a lengthy list, ever-growing, and it’s becoming challenging for benefits professionals, but that’s where Bruce is here to help.
Well, there’s a lot going on. I think that a lot of employers, it’s a challenge to keep up with everything that’s going on at the various state levels. And local levels, right? I mean, San Francisco, they’re Healthcare Security Ordinance, some of the localized regulations, Washington coming out of Seattle. But at the same time, while we have employers that need to pay attention to a lot of these various items, it can be increasingly challenged, as you alluded to, because we’re seeing a remote workforce.
There’s a lot of benefits to the remote workforce. Employers are able to recruit and retain a more diverse workforce when you’re not bound geographically.
But it also creates challenges, because suddenly those state regulations that you might not have had to concern yourself with because you didn’t have employees in Delaware suddenly come into play. Right? Because when you can recruit from anywhere, you get employees everywhere.
Well, this is great. I know we could talk for two more hours on these topics and had to pare down our topics a little bit so that we could can dive into the end of the National State of Emergency and such. But really appreciate you being flexible with us, Ben, talking about all of these various topics. I’m sure we’re going to be asking you back and drilling down into the topic of the end of the national emergencies between now and May, and I look forward to that conversation.
Same. Thanks, Bruce. Appreciate it.