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What You Need to Know About COVID Test Kit Rules for Group Health Plans

Starting Jan. 15, the nation’s health insurers have been required to cover the cost of up to eight at-home rapid COVID-19 tests per month for their health plan enrollees.

Insurers are taking different approaches to the mandate and, as an employer, you should communicate with your covered staff about this new benefit, how it works and other advice.

According to frequently asked questions posted by the Department of Labor, coverage for over-the-counter test kits must be covered by insurers without cost-sharing and without a doctor’s order or prescription. It laid out a series of rules insurers and health plans must follow. They:

  • May require enrollees to submit reimbursement claims for OTC COVID-19 tests (the agency, however, “strongly encourages” plans to reimburse pharmacies directly instead).
  • Must reimburse plan enrollees for tests they purchase outside of their preferred network up to $12 per test if they also offer coverage for OTC tests through a pharmacy network. Health plans are authorized to provide a more generous reimbursement from tests purchased through a non-preferred provider.
  • Can limit the number of OTC tests covered without cost-sharing, as long as they cover eight per month per enrollee with no cost-sharing. That means a family of three on a family plan can be reimbursed for up to 24 tests per month.
  • Cannot limit the number of covered tests if they are ordered by a doctor after a clinical assessment.
  • Can require enrollees to attest that OTC tests they are reimbursed for are for personal use and not for work, that they are not being reimbursed for the tests by other sources and that they won’t resell the tests.
  • Can require that enrollees provide receipts as proof of purchase.

Action items

Contact us or your group health insurer for guidance on how it will handle payment for OTC tests. It is important to:

  • Check that it has pharmacy and retailer networks in place where covered individuals can obtain the OTC tests.
  • Check if it has a direct-to-consumer shipping program for kits.
  • Check if it has systems in place to handle claims and for reimbursing either participants or participating pharmacies that have point-of-sale test kits available.
  • Ask the insurer whether it has any purchase or reimbursement limits if tests are purchased at a non-network pharmacy or retailer.

Once you have those details in hand, hold a meeting with your staff covering the following:

  • An explanation of the new benefit and how their insurer will reimburse or pay for the kits.
  • Go over the claims and reimbursement process if they pay out of pocket at a non-participating pharmacy.
  • Provide a list of network pharmacies and retailers that will offer point-of-sale test kits that the insurer pays for direct. Also provide information on any direct-to-consumer purchase options.
  • Tell them about any reimbursement limits if they purchase from non-preferred pharmacies, or other limits (like the eight tests per month limit).
  • Advise your staff to keep receipts for any at-home test kits they have purchased since Jan. 15. They should also save the boxes the test kits come in as some plans may require them as proof of purchase.

Long-Haul COVID Can Be Covered Under ADA

The Equal Employment Opportunity Commission has issued guidance stating that employees suffering from “long COVID-19” may be protected under workplace disability discrimination statutes.

The guidance states that someone suffering from impairments resulting from long-haul COVID-19 symptoms can be considered “disabled” under the Americans with Disabilities Act and entitled to the same treatment as other disabled workers. But not in every case.

The EEOC emphasized that long-haul COVID symptoms can vary greatly from person to person and that eligibility would have to be determined on a case-by-case basis.

Employers should read the guidance, posted on the EEOC’s website on Dec. 14, to ensure they stay on the right side of the law if they are confronted with a worker who is battling COVID-19 symptoms for more than a few weeks and they ask for special accommodation under the ADA.

According to the guidance, a person infected with COVID-19 who is asymptomatic “or who has mild symptoms similar to those of the common cold or flu that resolve in a matter of weeks — with no other consequences — will not have an actual disability within the meaning of the ADA.”

But for those who have COVID-19 symptoms lasting more than a few weeks, and depending on their specific symptoms, a worker may have a “disability” if the illness is affecting them in any of the following ways:

Physical or mental impairment — The EEOC states that COVID-19 is a physiological condition affecting one or more body systems, which would be considered a disability under the ADA.

Substantially limiting a major life activity — “Major life activities” include both major bodily functions, such as respiratory, lung or heart function, and major activities, such as walking or concentrating. COVID-19 has been known to cause these issues. An impairment need only substantially limit one major bodily function or other major life activity to be substantially limiting.

Examples of COVID-19 cases that may be considered a disability under the ADA include:

  • An employee who experiences ongoing but intermittent multiple-day headaches, dizziness, brain fog and difficulty remembering or concentrating, which their doctor attributes to the coronavirus.
  • Someone who received supplemental oxygen for breathing difficulties during initial stages of treatment and continues to have shortness of breath, associated fatigue and other virus-related effects that last for several months.
  • Someone with heart palpitations, chest pain, shortness of breath and related effects due to the virus that last for several months.

What to do

As a result of this guidance, an employee experiencing long-haul COVID with symptoms that could be considered a disability may ask for reasonable accommodation for work. To determine if the employee is eligible, the employer and the employee must enter into an interactive process.

The employer can ask the worker to provide backup documentation about their disability or need for reasonable accommodation, such as notes from doctors outlining restrictions. The employer can also request that the employee sign a limited release allowing the employer to contact the employee’s health care provider directly.

If the worker doesn’t cooperate in providing the information, the employer can deny the accommodation request.


Health Expenses a Major Source of Mental Health Issues for U.S. Workers

A new study has found that more than one in four U.S. workers say expensive medical bills are having a major impact on their mental health.

Mental health issues have come to the fore during the COVID-19 pandemic, spurring employers to expect their group health plans to do more for their workers in this area.

The report on the study by the health care consulting company Centivo urges employers to consider new ways to reduce the medical financial burden some of their employees may be experiencing.

Mental health is already on the radar of employers:

  • Large businesses reported that addressing their workers’ mental and emotional health would be a top priority over the next three to five years, according to a 2021 study by Mercer Consulting.
  • Nearly 40% of employers surveyed by the Kaiser Family Foundation in November 2021 said that they had made changes to their mental health and substance abuse benefits since the pandemic started.

The Centivo report found that:

  • S. workers are increasingly having difficulties in paying for health care, particularly due to high copays, deductibles and other health plan cost-sharing elements.
  • Health care affordability also correlates to sacrifices in care, including mental health care. Twenty percent of study participants who experienced major medical expenses said they skipped or delayed needed mental health care or counseling due to cost concerns.
  • Medical expenses are a significant cause of mental health and well-being issues for both individuals and families.

Stress drivers

The report states that the findings raise concerns about whether some employees can even afford to use their health plans. It stressed two main points:

High deductibles — The report found one of the main drivers of stress was high deductibles and other out-of-pocket costs.

It found that only 10% of those surveyed had a health plan with a zero deductible.

More troubling was that 40% of those with deductibles ranging from $1,000 to $3,999 did not have enough money saved to cover a major medical expense.

Savings trumps more features — The study found that group health plan enrollees’ top priority in their health plans is to save money, both on the front end in premiums as well as the back end in out-of-pocket costs.

Respondents said they would take saving money over expanded features, even if they had fewer choices in their health care. In fact, nearly three out of four respondents said they would trade off being able to see their current provider or specialist for a plan that is 10 to 30% less expensive than their current one.

The takeaway

One interesting finding in the study was the less that employees saved for health care, the more likely they were to report that a major medical expense had affected their mental health. Only those that reported more than $10,000 in savings reported low levels of mental health issues.

That highlights the need for employees to set aside funds for health care expenses through health savings accounts, flexible spending accounts and health reimbursement accounts. These are funded with deductions from the employees’ salaries before taxes are taken out.

Centivo’s chief medical officer, Dr. Wayne Jenkins, said that employers can help their workers reduce their overall medical outlays by working with their employee benefits brokers to:

  • Eliminate or reduce deductibles,
  • Engage with health insurers to provide simple and predictable copays, and
  • Make primary care visits free (which helps physicians diagnose serious ailments earlier, resulting in lower medical costs over time).

Also, businesses may consider “skinny plans,” which typically have fewer provider choices in exchange for lower premiums and out-of-pocket costs.


IRS to Get Tough on ACA Reporting Form Mistakes

The time when the IRS offers relief from financial penalties to employers that make errors on their group health insurance reporting forms has come to an end.

Starting this year, the IRS will no longer offer protection against reporting error penalties when “applicable large employers” (ALEs) file their Forms 1094-C and 1095-C and the employer has made a good-faith effort to comply. The change starting with the 2021 tax reporting year means that employers can face steep penalties for mistakes on their forms.

IRS Code requires employers who are obligated under the Affordable Care Act to offer their employees health insurance benefits to also file these forms annually. But since employers were required to first start filing these forms in 2018, the IRS has been lenient against those that make good-faith errors on the forms.

Typically, when the IRS identifies instances when an employer may be liable for employer shared-responsibility penalties based on information provided on the forms, the agency will send the employer a Letter 226J. These letters will identify an employee who may have received health insurance from their employer but is also receiving premium tax credits from a policy on an exchange.

To date, the IRS has allowed ALEs to ask for corrections on their filed forms, or to reduce the penalty without imposing reporting error penalties as well. That comes to an end this year when employers file their 2021 forms.

Issues to bear in mind

Here are a few issues businesses need to be aware of:

  • Starting this year, the IRS will no longer offer good-faith relief from penalties for incomplete or incorrect forms.
  • For the 2021 reporting year, these penalties are $280 per form that must be furnished to employees and $280 per form filed with the IRS.
  • According to reports, the IRS is especially focused on employers who may not be satisfying ACA requirements that all health plans they offer their staff must be “affordable,” which means costing no more than 9.83% of the employee’s household income for the 2021 tax year
  • Thanks to the American Rescue Plan Act, more Americans qualified for premium tax credits on ACA exchanges and the act drastically increased those tax credits to the point where some people were paying $1 a month for coverage. Employers could face reporting problems if any of their staff dropped their employer coverage and got coverage on an exchange.

Important dates

Jan. 31, 2022: Deadline for furnishing 1095-C forms to employees.

Feb. 28, 2022: Deadline to file paper 1094-C and 1095-C forms with the IRS (only for employers with fewer than 250 employees).

March 31, 2022: Deadline to file forms electronically with the IRS.