Since you asked: Will employer costs increase for covering the updated COVID-19 vaccines?

Question

The Food and Drug Administration recently approved updated COVID-19 vaccines. Given that the federal government stopped covering the costs of COVID-19 vaccines when the Public Health Emergency (PHE) ended on May 11, 2023, will my group health plan see an increase in costs?

Answer

Because COVID-19 vaccines must be covered by group health plans and the government is no longer covering them due to the end of the PHE, employers will likely see an increase in costs.^[1]

The Coronavirus Aid, Relief, and Economic Security Act (2020) requires non-grandfathered group health plans to cover — with no patient out-of-pocket costs — any health service intended to prevent or mitigate COVID-19 and that is either of the following:

• An evidence-based item or service with an “A” or “B” rating from the United States Preventive Services Task Force
• An immunization that is recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention

During the PHE, the federal government covered the cost of COVID-19 vaccines (although employer plan sponsors were required to cover the cost to administer them). Since the end of the PHE, group health plans are currently required to cover the COVID-19 vaccine on a first-dollar basis when delivered by a provider in the plan’s network. If delivered out of network, a group health plan is no longer required to cover the COVID-19 vaccine — or other qualifying COVID-19 preventive services — if in-network options are available, and the plan may impose cost-sharing.

Takeaway

Employer plan sponsors are strongly encouraged to discuss cost implications of covering the COVID-19 vaccines with their consultants and leadership and to adjust budgets accordingly.

Footnote

1. For more information on the end of the PHE, see “Departments issue FAQs on end of COVID-19 emergency declarations,” Insider, April 2023. Return to article undo