Our company does not cover occupation-related vaccines under our employer-sponsored group health plan. Are we required to cover those types of vaccines under the plan? If covered, what compliance issues do we need to consider?
Generally, it appears that occupation-related vaccines are not required to be covered under an employer-sponsored group health plan. When determining whether to cover occupation-related vaccines, companies should consider:
Occupation-related vaccines are those that help protect workers from risks that arise as a result of employment, including:
Most employers do not cover these types of vaccines under their group health plans, and in general they are not required to do so. If an employer opts to provide such coverage, key compliance factors that need to be considered are discussed below.
The Affordable Care Act (ACA) requires non-grandfathered group health plans to provide certain vaccines at no cost to participants. Specifically, under the ACA, first-dollar coverage is required for immunizations for “routine use” for children, adolescents and adults as recommended by the Advisory Committee on Immunization Practices (ACIP), a committee within the Centers for Disease Control and Prevention (CDC). To be considered for routine use, a vaccine must be listed on the CDC’s Immunization Schedules; otherwise, it is not preventive for ACA purposes and does not have to be covered at no cost.
For example, neither pre-exposure nor post-exposure vaccines for rabies appear on the CDC Immunization Schedules for either adults or children/adolescents. So, it appears the ACA does not require group health plans to cover the rabies vaccine, even for work-related purposes.
Internal Revenue Code section 223 permits eligible individuals to establish health savings accounts (HSAs). Only eligible individuals are allowed to contribute to an HSA or to receive HSA contributions from an employer. To qualify, the individual must be covered under an HDHP and have no disqualifying coverage. An HDHP is a health plan that meets certain required minimum deductibles and maximum out-of-pocket expenses and may not provide benefits for any year until the minimum annual deductible (self-only or family) is satisfied. However, the IRS provides a safe harbor that allows HSA-qualified HDHPs to waive the deductible for preventive care benefits.
Preventive care under an HDHP is defined by the IRS in various pieces of guidance, which also incorporate the ACA preventive care guidelines discussed above. Specifically, under the HDHP/HSA preventive care guidance, the IRS-provided safe harbor definition for preventive care as it relates to immunizations is not limited in the same manner as the ACA definition. IRS Notice 2004-23 does not distinguish between vaccines for personal use and those that are occupation-related. So, HDHPs appear to be able to cover occupation-related vaccines at first dollar, without a participant meeting the minimum annual deductible or affecting an individual’s HSA eligibility.
ERISA sets standards of conduct for those who manage an employee benefit plan and its assets (called fiduciaries). Under ERISA, fiduciaries must act solely in the interest of plan participants and beneficiaries and with the exclusive purpose of providing benefits to them. A question may arise as to whether paying for occupation-related vaccines out of a group health plan is solely in the interest of plan participants and beneficiaries — instead of in the interest of the employer, which would be a misuse of ERISA plan assets. This may be why most employers pay occupational health costs outside of their ERISA group health plans to avoid any appearance of fiduciary impropriety.
However, it may be possible for employers to simply carve out the cost of the occupation-related vaccines covered under their group health plans before developing their budget rates so that no employee contributions are going toward the cost of the vaccine. This would appear to avoid any fiduciary issue with the ERISA group health plan.
