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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

by Jacob Mattinson and Teal Trujillo | Jan 14, 2022 | Employee Benefits, Employment, Health and Welfare Plans

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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What Are the Pros and Cons of Returning to the Office?

by Tina Martini | Jan 13, 2022 | Employment, Labor

While remote work provides many conveniences, the office offers an ‘interpersonal glue’ that is difficult to replicate when working from home. As McDermott Partner Tina Martini notes in this Chicago Lawyer article, there are countless opportunities to develop professional and personal relationships in the office.

“I don’t think I would be where I am today as an attorney and professional if I didn’t have these chances,” Martini said.

Read more here.

Federal Vaccine Mandates Are Back in Play (For Now)

by Michelle S. Strowhiro, Abigail M. Kagan and Sandra M. DiVarco | Dec 22, 2021 | Employee Benefits, Employment, Health and Welfare Plans, Labor

The courts continue to move the vaccine mandate goalposts on employers as dozens of legal challenges work their way through the courts. The latest developments are major game changers for employers. As of today, the US Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS) vaccine-or-test rule is enforceable nationwide, and the US Centers for Medicare & Medicaid Services (CMS) Interim Final Rule (IFR) mandating vaccination, subject to exemptions, is enforceable in 25 states.

Read more here.

New IRS Guidance for Tax-Qualified Pension Plans with Rehired Retirees Due to COVID-19

by Diane Morgenthaler | Dec 9, 2021 | Employee Benefits, Employment, Fiduciary and Investment Issues, Retirement Plans

The Internal Revenue Service (IRS) recently updated its guidance for retiree distributions under a defined benefit plan. Specifically, the new IRS guidance addresses rehires following a bona fide retirement due to COVID-19.

As a background, a defined benefit plan may make distributions to a retiree only in the case of a “bona fide retirement,” which is a facts and circumstances analysis. In prior rulings, the IRS indicated that retiree distributions without a bona fide retirement can cause a defined benefit plan to lose its tax-qualified status, where both all contributions and earnings become immediately taxable.

According to the IRS, a rehire due to COVID-19-related “unforeseen circumstances” generally would not disqualify an individual’s prior retirement from being considered a bona fide retirement under a defined benefit plan. However, the IRS cautioned that such a rehire cannot include any prearrangement to rehire the individual prior to the individual’s retirement. Such a prearrangement still yields a retirement that is not “bona fide.”

Finally, although the IRS issued this guidance in question and answer format primarily for defined benefit plans, plan sponsors should be able to apply the same rationale to distributions from defined contribution plans. In short, the new IRS guidance provides welcome relief to plan sponsors and employers who are looking to rehire retirees in a tight job market.

Major Health Systems, Hospital-at-Home Company Launch Advocacy Effort

by Mara McDermott | Nov 24, 2021 | Employee Benefits, Health and Welfare Plans

A coalition launched by several major health systems and a hospital-at-home company aims to continue delivering hospital-level-at-home care in the wake of the COVID-19 pandemic. McDermott+Consulting Vice President Mara McDermott said providers have demonstrated that the model is “of high value to patients.”

“At the end of the pandemic, without some sort of extension, the new model is at risk of going away or dramatically shrinking,” McDermott said. “Action by the federal government will ensure that this important and innovative source of care can continue.”

Read more here.

The “New” Digital Healthcare Delivery System

by Michael Ryan and Jennifer S. Geetter | Nov 18, 2021 | Digital Health, Employee Benefits, Health and Welfare Plans

Although digital health solutions have long been a key area of strategic growth for the healthcare industry, the COVID-19 crisis accelerated what it means to deliver safe and effective digitally-based care. As the United States shifts focus from short-term crisis response to longer-term solutions, what does a digitally-driven healthcare industry look like, and how can healthcare entities maintain the highest standards of care and meet patient expectations while constructively disrupting out-of-date practice patterns? During a recent virtual conversation, McDermott Partners Michael W. Ryan and Jennifer S. Geetter addressed these questions and more.

Read more here.

Women and the Pandemic Workplace: Corporate Leadership’s Important New Challenges

by Michael W. Peregrine | Nov 16, 2021 | Employment, Labor

While a recent McKinsey and LeanIn.org women and the workplace study pointed to positive gains for women in corporate leadership roles in 2020, women continue to face substantial burdens in their careers. According to this Forbes article, McDermott Partner Michael Peregrine says such burdens pose a “significant threat to the economic and cultural health of an organization.” These burdens include hierarchical validation, burnout, and significant bias and discrimination for women of color.

“Ideally, boards can use the 2020 progress as evidence that their leadership on gender equity can—and does—make a difference,” Peregrine notes.

Access the article.

When Is COVID-19 a Disability? Courts Tackle Issue in Bias Cases

by Brian Mead | Nov 3, 2021 | Employee Benefits, Employment, Health and Welfare Plans

A Pennsylvania federal judge recently allowed an employee to move forward with a discrimination lawsuit after her employer terminated her following a positive COVID-19 test result. According to this Bloomberg Law article, the judge noted that COVID-19 could be considered a disability under the Americans with Disabilities Act (ADA); however, it’s unclear if the ADA also protects infected workers before they display long-haul COVID-19 symptoms. McDermott Partner Brian Mead said the employee’s presentation of long-haul COVID-19 symptoms (including loss of smell and taste) was also key in the judge’s ruling.

“The difference between having a cough or a substantial lung impairment is the difference between being covered by the ADA or not covered,” Mead said.

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

by Sarah Raaii and McDermott Will & Emery | Nov 2, 2021 | Employee Benefits, Employment, Health and Welfare Plans

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.

Corporate Governance and the Permanency of COVID-19

by Michael W. Peregrine | Oct 26, 2021 | Employment

As COVID-19 becomes an endemic threat, corporate officers should accept the fact that the virus will be a permanent enterprise risk for the indefinite future.

In this FT Specialist article, McDermott Partner Michael Peregrine says corporate boards should place their focus on business and operational challenges that result from the pandemic. These include:

Enhanced workplace safety in response to delta’s extreme transmissibility;
An equitable, enforceable and sustainable approach to employees who do not get vaccinated;
The feasibility of current return-to-work plans;
Work-from-home arrangements as a more permanent employment model; and
The pandemic’s outsize impact on female employees.

Access the article.

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