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Are Out-of-Pocket Costs on Their Way Out? At-Home COVID-19 Testing and Expanded Preventative Healthcare for Women and Children

In response to a directive from the White House, based on provisions of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security (CARES) Act that eliminated cost sharing for COVID-19 diagnostic testing, three federal government departments—the US Department of Health and Human Services (HHS), the US Department of Labor (Labor) and the US Department of the Treasury (Treasury)—issued guidance in the form of frequently asked questions (FAQs) that states group health plans and insurers must also cover over-the-counter (OTC) COVID-19 diagnostic testing. This guidance is effective beginning January 15, 2022.

In addition, the Health Resources and Services Administration (HRSA) updated the Affordable Care Act’s (ACA) comprehensive preventive care and screening guidelines for women and children to cover additional services and supplies without a copay or deductible, effective 2023.

COVID-19 AT-HOME TESTING COVERAGE

On January 10, 2022, HHS, Labor and the Treasury together issued FAQs that elaborated on prior guidance and indicated that group health plans and insurers are required to cover OTC COVID-19 diagnostic tests without cost sharing. Because of the recent spike in COVID-19 cases resulting from the rapid spread of the Omicron variant, the guidance will continue for the duration of the public emergency.

Most consumers with private health coverage will be able to buy OTC COVID-19 tests and either have the cost covered upfront or be reimbursed later by submitting a claim to their health plan. The new requirement only applies to “diagnostic” OTC COVID-19 testing. It does not include the treatment of COVID-19 or testing that is for employment purposes.

The guidance provides that health plans and insurers must cover at least eight OTC COVID-19 diagnostic tests per covered individual per a 30-day period. Insurers will be able to set up networks of preferred suppliers to provide OTC COVID-19 tests directly to participants without upfront costs. Insurers must still reimburse OTC COVID-19 tests purchased outside the direct coverage program, however, the reimbursable amount is limited to $12 per test if the health plan also provides tests through its preferred pharmacy network and through a direct-to-consumer shipping program without upfront costs.

Besides the risk of increasing the average cost of OTC COVID-19 tests, the new initiative raises concerns over fraud and abuse. For health plans and insurers to protect themselves, the FAQs provide several examples of permissible activities to prevent fraud and abuse, like requiring proof of purchase or an attestation that the test was purchased for proper purposes (i.e., is being used by the covered individual, is not being reimbursed by another source, is not being resold and is not for employment purposes).

HRSA UPDATES ACA PREVENTIVE HEALTHCARE GUIDELINES

On January 11, 2022, HRSA announced that it updated the preventive health and screening guidelines for women, infants, children and adolescents. Under the ACA, certain group health plans and insurers must provide coverage with no out-of-pocket costs for preventive health services within these HRSA-endorsed comprehensive guidelines.

HRSA accepted the updates recommended by the Women’s Preventative [...]

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Agencies Clarify How Employers Can Charge COVID-19 Vaccine Premium Incentives

On October 4, 2021, the US Departments of Labor, Treasury, and Health and Human Services issued guidance regarding the application of the Health Insurance Portability and Accountability Act (HIPAA) wellness rules to vaccine-related premium surcharges and discounts, clarifying that employers may charge vaccine premium incentives if they adhere to the requirements of activity-only health-contingent programs.

Employers have grown more interested in exploring incentives designed to increase COVID-19 vaccination rates among employees. Some employers have announced plans to charge unvaccinated employees higher contributions for health coverage than vaccinated employees, while some have been considering other options, such as excluding coverage for COVID-related illnesses, charging higher cost-sharing for COVID-19-related illnesses and offering more generous plan options to employees who are vaccinated.

Read more here.




Global Employment Law Update

Employment law continues to evolve, and it can be a challenge amid an ever-changing landscape of local employment laws for human resources executives and employment counsel at multinational businesses to maintain a consistent global corporate culture.

McDermott’s Global Employment Law Update brings you the key highlights from across Asia, Africa, Europe, Latin and North America. Developed in collaboration with peer firms operating in more than 50 countries, this resource guide contains summaries of the laws and significant court decisions that impacted employers and employees all over the world. It includes:

  • COVID-19 legislative updates
  • Remote work and telecommuting policies
  • Data privacy protections
  • Minimum wage and salary compensation updates
  • Changes to labor protection laws
  • Sexual harassment modifications

Access the report.




Consolidated Appropriations Act: Health and Welfare Benefits Provisions

The Consolidated Appropriations Act (the Act) was signed into law by the president on December 27, 2020, and includes significant health and welfare benefits provisions that affect group health plans and health insurance issuers. The Act is the most comprehensive single piece of legislation to impact group health plans since the Affordable Care Act.

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Supreme Court Appears Willing to Leave Obamacare in Place

During arguments in a case seeking to eliminate Obamacare, two of the US Supreme Court’s conservative justices signaled they would not strike down the landmark legislation. In a recent article by CNBC, McDermott partner Michael Kimberly discussed the significance of this case and the Court’s upcoming decision.

Access the article.




Finally SECURE: Opportunities in the 2019 SECURE Act for Plan Sponsors

The SECURE Act—the most significant piece of retirement plan legislation in more than a decade—is now law. Plan sponsors should immediately start considering how changes included in the SECURE Act could impact their retirement and health and welfare plans in 2020 and beyond.

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Fifth Circuit Issues ACA Ruling, But Severability Question Remains

A decision in Texas v. United States was issued by a divided three-judge panel of the US Court of Appeals for the Fifth Circuit on December 18, 2019. This case presented once again the question whether the Affordable Care Act (ACA) is constitutional and sustainable, and questions of severability remain for the near future.

Access the full article.




Transgender Health Benefits: Best Practices and Legal Considerations

A growing number of medical organizations, courts and administrative bodies have stated that transition-related medical care is medically necessary and should be covered by employer-sponsored medical plans. Access to employer-sponsored healthcare coverage for transgender workers has become an issue of focus for civil rights advocacy groups such as Lambda Legal and the American Civil Liberties Union, and there has been an uptick in discrimination lawsuits filed against health plans and insurers denying such care.

These trends highlight the importance of weighing the legal and business considerations that come with providing (or not providing) comprehensive health benefits for transgender workers. Health plan sponsors and insurers should consider how the decision to provide or exclude transition-related medical coverage will affect their legal compliance, overall costs and workplace culture—all of which are discussed in this article.

Access the full article.

Originally published in Benefits Magazine, August 2019.




SCOTUS Refuses to Review Ninth Circuit Ruling on ACA Birth Control Rules

The US Supreme Court declined to review a recent Ninth Circuit decision, blocking the interim rules that exempted employers with religious or moral objections from providing birth control coverage required by the Affordable Care Act (ACA). Until such time as this issue is clarified, it is prudent for employers with employees in certain states to comply with the ACA mandate and to cover contraceptives under their health plans.

Access the full article.

Teal Trujillo, a summer associate in our Chicago office, also contributed to this article.




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