End of COVID emergency gives employers more work

Now that the three-year national emergency to respond to the COVID-19 pandemic has ended, a new project for employers has begun. On April 11, President Biden signed a bipartisan congressional resolution to bring the emergency to a close, but now there are several things local businesses should considering with respect to obligations of COBRA and the Health Insurance Portability and Accountability Act (HIPAA).

Paul Kaster, legal counsel and compliance attorney at McClone Insurance, which last year partnered with Madison’s Neckerman Insurance Services, said actions are required with respect to the 60-day COBRA election window and the 30-day grace period to make COBRA premium payments. According to Kaster, most plan sponsors (employers) need to take three different steps. The first one is understanding how the national emergency and its deadlines affected COBRA, which is named for the enabling law (the Consolidated Omnibus Budget Reconciliation Act of 1985) and how it affected HIPAA special enrollment, which are opportunities for individuals and their families to access health care if they’ve been terminated or lost their employment, or if they never had health care through the HIPAA special enrollment periods.

Paul Kaster

Paul Kaster

Those deadlines are known as outbreak periods and, according to the national emergency, they expire 60 days after expiration of the emergency. In this case, the national emergency ended on April 10, “so we have 60 days after that for COBRA or HIPAA special enrollment periods to continue,” says Kaster. “After that, they’re no longer in effect. You’re going to go back to the traditional COBRA aspects of ascertaining health care 60 days after loss of coverage should you lose it.”

Sixty days from April 10 is Friday, June 9, but there is a fair amount of communication planning work to do before that date, and your health insurer, insurance broker, and attorney can provide assistance.

Another thing employers must do is connected to the public health emergency, which is related to the national emergency but different. The public health emergency is declared by the secretary of the Department of Health and Human Services (HHS), and those emergencies go for 90 days and can automatically be renewed. That is set to expire on May 11 unless Congress acts move it up, which now appears unlikely.

“What the public health emergency provides plan sponsors and employees is testing and treatment associated with COVID or related illnesses,” Kaster explains. “All of those right now tend to be at no cost to the employees. Once that changes, insurers are free to have cost-sharing measures. For instance, in high deductible health plans, you have to meet your high deductible amounts before the plan would kick in, or there could be some type of copays associated with that.”

Kaster adds that COVID vaccinations will continue to be fully covered despite the two emergencies coming to an end.

Regarding the communication steps, plan sponsors (employers) must inform their employees about changes in their health care coverage, and there are two ways to do that. “You have what’s called an SPD [summary of planned description] wrap,” Kaster notes. “It says ‘summary,’ but they tend to be a little bit longer, and they require a whole lot more investment of time and effort on the part of the plan sponsor.

The other option would be a summary of material modification, or SMM documents, which would, on a short-term basis, allow employees to understand the forthcoming changes 60 days after the national emergency has ended should you need to have some type of COVID-related or outbreak-period deadlines.

“The COBRA aspect really gives workers and their families continued health care for a period of time, and what the national emergency did was give them a 60-day election period and whether or not to actually take the coverage, as well as a 30-day payment grace period (under the national emergency), and that provides quite an extended amount of time whether or not an individual or the family is going to accept the health care provided by the employer,” says Kaster.

Perhaps the best example is that when an employee is terminated on a particular date, they usually have a set time period to elect COBRA continuation coverages within the election notice. Now, however, the outbreak period will reduce that period to June 9. “Afterward, they’re going to revert back to the traditional COBRA time period,” Kaster states.

Meanwhile, HIPAA ensures that all individuals have access to health care. The national emergency granted a 30-day grace period called the special enrollment period, which allowed individuals and their families an additional time period of 30 days to access health care coverage under the HIPAA provision. With the end of the emergency, this special enrollment period will go away as of June 9.

Handier handbooks

In addition to the communications that touch base on the SPD wrap and the SSM, employers also need to review their employee handbooks along with any policies or procedures that were created during the pandemic and the national emergency or public health emergency periods, to make certain that once they expire, their policies are up to date and reflect the changes.

“The reason for this is to ensure that the companies are maintaining their documentation at least for three years because they’re still subject to audits by HHS, the IRS [Internal Revenue Service], or other governmental regulatory agencies that could come in and take a look at whether their policies, procedures, or handbooks are in line with the laws,” Kaster says. “So, it’s a little bit of work on the employer’s part to make certain that any changes that they made with their policies, procedures, and employee handbooks are now reviewed and made up-to-date with these changes that are just around the corner.”