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What the end of the COVID-19 emergencies will mean for group health plans

By Maureen Gammon , Anu Gogna and Benjamin Lupin | February 15, 2023

Group health plans face key decisions on coverage related to COVID-19 as the national emergencies are scheduled to end on May 11, 2023.
Benefits Administration and Outsourcing Solutions|Health and Benefits
Risque de pandémie

The Biden administration recently announced that the COVID-19 public health emergency (PHE) and the COVID-19 national emergency declaration are scheduled to end on May 11, 2023. The end of the COVID-19 national emergency declaration will trigger the eventual end of the Outbreak Period (60 days after May 11, 2023), during which deadlines for certain Internal Revenue Code and ERISA requirements have been extended. As a result, employers will need to make some decisions and determine what changes, if any, to make to their group health plans.

As background, the Secretary of the Department of Health and Human Services (HHS) declared a PHE for COVID-19 on January 27, 2020. In March of that same year, former President Donald Trump issued a COVID-19 national emergency declaration. Under these emergency declarations, both the Trump and Biden administrations implemented and extended programs to provide relief when it came to paying for healthcare, COVID-19 testing and treatment, and monthly student loan payments, among other things.

Group health plans and employer plan sponsors will need to consider the issues outlined below as they prepare for the end of the COVID-19 emergencies.

Public health emergency

COVID-19 testing

While the PHE is still in effect, group health plans are required to cover COVID-19 tests and related services without cost sharing or prior authorization, including over-the-counter (OTC) COVID-19 tests authorized, cleared or approved by the Food and Drug Administration. In addition, plans are required to cover up to eight free OTC at-home tests per individual per month without the need for a physician’s order or prescription, and plans may limit reimbursement to the actual or negotiated price, or $12 per test (whichever is lower). Plans can set up pharmacy or retailer networks to provide OTC tests for free rather than having patients pay up-front and then submit claims for reimbursement.

At the end of the PHE, group health plans will no longer be required to cover free COVID-19 tests (including OTC COVID-19 tests). Employers will need to determine:

  • If they will cover the full price — or any portion — of OTC COVID-19 tests and related services (both in and out of network)
  • Whether patients will need a prescription for a PCR test
  • If plan documents need to be amended to reflect changes related to COVID-19 tests and what participant notifications would be required
  • Whether to cover treatments (such as Paxlovid) with or without cost sharing (note: group health plans have not been required to cover COVID-19 treatment)

COVID-19 vaccines

While the PHE is still in effect, group health plans must cover COVID-19 vaccines without cost sharing, even when provided by out-of-network providers, and reimburse out-of-network providers a reasonable amount for administering the vaccine. The Medicare reimbursement rate has been deemed to be a reasonable amount.

At the end of the PHE, employer-sponsored group health plans must meet the Affordable Care Act (ACA) requirement to cover COVID-19 vaccines at no cost from in-network providers. Employers will need to:

  • Budget for the costs of these vaccines
  • Determine the cost-sharing amount for vaccines received from out-of-network providers

HDHP/HSA eligibility and telehealth

Under a safe harbor in the Coronavirus Aid, Relief, and Economic Security Act, health savings account (HSA)-qualifying high-deductible health plans (HDHPs) can offer telehealth benefits and other remote care services to participants prior to meeting the plan’s minimum annual deductible without risking the participant’s HSA eligibility. When signed into law in December 2022, the Consolidated Appropriations Act, 2023 extended the telehealth safe harbor for plan years beginning after December 31, 2022, and before January 1, 2025.

With the two-year extension of the safe harbor, employers will need to:

  • Determine if they will take advantage of the extended safe harbor and update plan documents accordingly
  • Be prepared to remove this provision when it expires if Congress does not extend it further in future legislation

Note: Non-calendar year HSA-qualified HDHPs may experience a gap in telehealth relief. The most recent relief extension applies for plan years beginning after December 31, 2022, and before January 1, 2025. The telehealth safe harbor was first available for plan years beginning on or before December 31, 2021. It was extended again for months beginning after March 31, 2022, and before January 1, 2023, meaning without additional IRS guidance, non-calendar year HDHPs could experience a gap in telehealth relief between January 1 and March 31.

Stand-alone telehealth

For the duration of any plan year beginning during the COVID-19 PHE, relief from certain ACA group market reforms is available for group health plans that solely provide telehealth and other remote care services only to employees who are not eligible for coverage under any other group health plan offered by that employer. Such arrangements, however, must still comply with the reforms that prohibit exclusions on preexisting conditions, prohibit discrimination based on health status and prohibit rescissions in addition to reforms relating to mental health or substance use disorder benefits.

Stand-alone telehealth benefits must be terminated at the end of the plan year after May 11, 2023. It is not clear whether COBRA continuation coverage would need to be offered. Employers should:

  • Discuss with legal counsel whether they must offer COBRA continuation coverage
  • Inform participants of their decision to end the benefits within 60 days of that decision, even if COBRA does not apply

Employee assistance programs

An employee assistance program (EAP) that meets the requirements to be considered an “excepted benefit” (including that it does not provide significant benefits in the nature of medical care) may cover diagnosis and testing for COVID-19 and COVID-19 preventive care while a PHE declaration or national emergency declaration is in effect without risking its status as an “excepted benefit.”

Employers that added COVID-19 testing or preventive care to an EAP will want to:

  • Consult with their legal counsel to determine whether continuing to include such testing and/or preventive services in the EAP will risk the EAP’s status as an “excepted benefit”
  • Update plan documents and properly notify participants, if necessary

Mental health parity compliance

While the PHE is still in effect, enforcement of certain Mental Health Parity Addiction Equity Act (MHPAEA) requirements — related to the coverage of COVID-19 testing items and services without cost sharing, prior authorization or other medical management requirements — is suspended.

After the PHE ends, employers may want to perform financial requirement testing to remain in compliance with MHPAEA if their plan expects to continue covering COVID-19 testing items and services with no cost sharing.

Notice of changes (and reversal of changes after emergencies)

Under requirements that apply to the Summary of Benefits and Coverage, plans and issuers must provide participants with 60 days’ advance notice of any material changes to the terms of the plan or coverage. However, while the PHE is still in effect, participants can be notified as soon as reasonably practicable for any change that adds benefits, or reduces or eliminates cost-sharing requirements, for the diagnosis and treatment of COVID-19 or telehealth and other remote care services — and the reversal of those changes when the emergency ends.

If a plan reverses such changes, it will meet the advanced notification requirement if either of the following occurs:

  • The plan previously notified participants of the general duration of the additional benefits coverage or reduced cost sharing.
  • The plan notifies participants within a reasonable timeframe in advance of the reversal of the changes.

ICHRA notice and ACA grandfathered health plans

During the COVID-19 public health or national emergency period, if an ACA grandfathered group health plan adds benefits, or reduces or eliminates cost-sharing requirements, for the diagnosis and treatment of COVID-19 or for telehealth and other remote care, that plan will not lose its status due to those changes being reversed after the emergencies end. Further, individual coverage health reimbursement arrangement (ICHRA) rules require that participants must receive a notice (generally at least 90 days before the start of the plan year) that includes important information about ICHRA requirements, terms and certain consequences of accepting ICHRA coverage.

After the COVID-19 national emergencies end:

  • According to the DOL, an ICHRA notice that would be required between March 1, 2020, and 60 days after the announced end of the COVID-19 national emergency can be furnished as soon as administratively practicable
  • Employers with ACA grandfathered plans will need to inform participants of the changes; removing the benefits that were added during the COVID-19 emergencies will not cause the plan to lose grandfathered status

National emergency

Outbreak period

Group health plans subject to ERISA or the Internal Revenue Code must disregard the Outbreak Period (i.e., the period beginning March 1, 2020, and ending 60 days after the end of the COVID-19 national emergency) in determining the following periods and dates (on an individual-by-individual basis):

  • The 60-day election period for COBRA continuation coverage
  • The date for making COBRA premium payments
  • The deadline for employers to provide individuals with notice of their COBRA continuation rights
  • The 30-day (or 60-day in some cases) special election period (SEP) to request enrollment in a group health plan
  • The time frames for filing claims under the plans’ claim-processing procedures
  • The deadlines for requesting internal and external appeals for adverse benefit determinations

Effective July 10, 2023, all pre-pandemic rules affecting the above items will go back to their normal time frames. Employers should consider the following actions:

  • Send notices to individuals informing them of upcoming COBRA election and payment deadlines and that they will lose their right to COBRA coverage if they do not meet the deadline(s)
  • Send notices to individuals informing them that the extensions are ending and that their deadlines to file claims and appeals or to request external reviews may be upcoming
  • Send notices to individuals informing them that the extensions are ending and that their deadlines to request HIPAA special enrollment are ending
  • Review the plan documents and employee communications to ensure all materials accurately reflect that the extended deadlines no longer apply and remove any reference to the Outbreak Period
  • Send COBRA election notices (if the plan sponsor took advantage of the extended deadlines)

Qualified disaster relief payments

During the COVID-19 national emergency, employers have been allowed to make payments or reimbursements to employees on a tax-free basis for expenses that “incurred as a result of” the COVID-19 pandemic. Under the tax code, an individual does not have to count qualified disaster relief payments as gross income.

Employers that implemented a qualified disaster relief program will want to revisit (and likely terminate) the program or make any future payments taxable to the employees.

Going forward

Government agencies will likely issue guidance to help plan sponsors transition out of the COVID-19 emergencies. Employer plan sponsors should consult with their carriers/third-party administrators and legal counsel before making any changes to their group health plans as a result of the end of the COVID-19 emergencies.


Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

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