Last Updated: 4.16.20
This blog is an attempt to provide up-to-date information related to coronavirus and its impact on health insurance and benefit plans. Information is evolving rapidly and we will do our best to keep the information as current as possible. This blog will be pinned to the top of our page an updated regularly.
Benefits Education
Quizzify, the independently validated health literacy platform, is a go to source of knowledge and ongoing entertainment for all things healthcare. The Quizzify team has released a series of FREE online quizzes to combat the series of misinformation and share knowledge about this virus and how to stay safe.
Low cost and free insulin
Eli Lilly announced on April 7, 2020 that anyone who has commercial insurance, or no insurance, can purchase their monthly prescription of Lilly insulin for $35 through the Lilly Insulin Value Program.
The Lilly Insulin Value Program is effective today and covers most Lilly insulins, including Humalog and non-branded insulins. Here is a link to their full announcement.
Novo Nordisk, which operates a huge insulin manufacturing facility in Johnston County, is offering diabetes patients free insulin for 90 days if they have lost health insurance coverage due to jobs lost due to the COVID-19 economic crisis.
“Through this enhancement, applicants are not required to provide documented proof of income. Participants must provide documentation showing loss of healthcare benefits, such as a job termination notice or job status change, or proof that COBRA benefits are being offered,” the company said.
Is Now the Best Time to Buy Life Insurance?
Many insurance companies are offering accelerated underwriting options for individual life insurance policies. Accelerated underwriting generally means that a nurse visit and labs are not a pre-requisite nor a requirement to apply and be approved for life insurance. Many insurance companies, including Principal Financial, have announced expanded accelerated underwriting options and the ability to purchase up to $2.5M in coverage. The process for each insurance company will be slightly different and nuanced however, the general process includes completing an online application and having a phone interview with a registered nurse.
Keeping American Workers Paid and Employed Act
The title coveys the message. It is a Pearl Harbor Day plea for small businesses to maintain payroll at pre-COVID levels and a $300 billion commitment by the federal government to pay your costs (plus some) to a rally to that plea.
The primary point: maintain payroll at pre-COVID impact levels, obtain a loan to cover the relevant costs, plus many operating costs and the loan will be forgiven if you maintain payroll. The targeted payroll levels have been moved back to 2/15/2020. The end date for calculation of the loan (and final payroll review) has been extended to 6/30 (from 4/30).
The provisions of the Small Business payroll and group health provisions have been substantially enhanced. The amount that can be borrowed now consists of payroll (defined below), plus the following:
(1) salary, wage, commission, or similar compensation;
(2) payment of cash tip or equivalent;
(3) payment for vacation, parental, family, medical, or sick leave;
(4) allowance for dismissal or separation;
(5) payment required for the provisions of group health care benefits, including insurance premiums;
(6) payment of any retirement benefit; or
(7) payment of State or local tax assessed on the compensation of employees; and
(8) the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year prorated for the covered period.
Loan proceeds can be used for the listed payroll costs, plus the following operating costs:
(1) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
(2) employee salaries, commissions, or similar compensations
(3) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
(4) rent (including rent under a lease agreement);
(5) utilities; and
(6 ) interest on any other debt obligations that were incurred before the covered period.
The loans will be forgiven under Section 1106 to the extent they were used on the following:
(1) Payroll costs;
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.
Businesses with 500 or fewer employees are eligible, except for restaurants, which are eligible regardless of size.
This is a slightly different formula than the initial CARES Act version, which was based almost entirely on payroll comparisons. The practical effect is the same, but the ability to pay not payroll costs if payroll drops a bit is an enhancement.
If some of the loan is not forgiven, the balance is payable over time with 4% interest.
We’ve researched the “how do I sign up issue a bit.” The basic message is go to your local bank with documentation of costs that can be borrowed. Reportedly all banks will be prepared. No underwriting, no personal guarantees. Banks are expected to provide same day processing and deposit the money in your account. Even EINs and other info can be provided later.
Eligibility only requires self-certification of a COVID-19 impact.
Coronavirus Testing, Cost Sharing and H.S.A.s
The IRS has issued clarification that for health plans that provide coronavirus testing with no-cost share (no copay, no deductible) will NOT violate HSA requirements. Thus, you will be able to maintain HSA eligibility status if your plan covers testing at 100%.
July 15, 2020 is the new 2019 tax filing deadline. Because the due date for filing Federal income tax returns is now July 15, 2020, under this relief, you may make contributions to your HSA or Archer MSA for 2019 at any time up to July 15, 2020. For more details on HSA or Archer MSA contributions, see Publication 969, Health Savings Accounts and other Tax-Favored Health Plans.
FSAs, HSAs, and HRAs
OTC products as eligible expenses
The CARES Act permanently reinstated over-the-counter products as eligible expenses for Health Savings Account (HSA), Flexible Spending Account (FSA) and Health Reimbursement Arrangement (HRA) funds without a prescription. This reverses laws put in place by the Affordable Care Act nearly 10 years ago, which stated that those expenses were only eligible for reimbursement with a prescription. This change takes place retroactive to January 1, 2020.
Menstrual care included as eligible
Menstrual care products were added as eligible expenses as part of the legislation. That means employees can now use their HSA, FSA and HRA funds to purchase items such as tampons, pads and menstrual sponges. This change also takes place retroactive to January 1, 2020.
HDHPs and Telehealth services
The CARES Act temporarily allows High-Deductible Health Plans (HDHPs) with an HSA to cover any telehealth or remote care expenses, even if the participant hasn’t reached his/her deductible. This change continues through 2020 and 2021 (for calendar year plans). This comes after the recently passed Families First Coronavirus Response Act required certain coronavirus-related telehealth expenses to be covered with no cost sharing.
Free Testing
Most major health insurance carriers have announced that coronavirus diagnostic testing will be provided with no member cost share. For fully-insured plans this means that testing will be available to members for free. Self-funded plan sponsors will need to make this determination and coordinate with their stop-loss coverage.
AHIP has provided a listing of insurance companies providing free testing.
Special Enrollment Period
Both UnitedHealthcare and Anthem Blue Cross have announced special enrollment periods for group health plans. The new enrollment periods apply to small-group fully insured plans for both UHC & All Savers and well as small-group Anthem Blue Cross plans. These group health plans will have from March 23rd to April 6 to allow for employees to enroll or add eligible dependents to their employer-sponsored health plan for an April 1 effective date.
In addition, UHC is allowing furloughed employees as well as those that have experienced reduced hours as a result of COVID-19 to remain covered under the health plan so long as the employer continues to contribute the same amount and treats all employees in these classes the same.
Considerations for Self-Funded Health Plans
The Phia Group has put together a comprehensive overview of considerations for self-funded health plans.
We’ve also uploaded sample plan amendment language for Summary Plan Documents (SPDs)
Short-Term Disability Coverage
In general, short-term disability coverage does not cover quarantine but disability coverage continues during quarantine. For those that test positive, Covid-19 is handled the same way as any other disability.
It is possible that coverage will continue during a temporary layoff if an employer continues to pay premium. Each insurance company will respond differently but we have identified a handful that have attested to this.
Short-Term Insurance Plans and Health Sharing Ministries
The Affordable Care Act (ACA) sets a few minimum coverage standards that apply to most private health plans. For example, the ACA requires most private plans to cover designated preventive services with no cost sharing. Even these ACA coverage standards do not apply to all private coverage, however, including short-term policies, health care sharing ministries, and certain Farm Bureau health plans that are not subject to any federal minimum coverage standards.
What to do if you’ve been furloughed or had hours reduced
This is going to be a challenge for many working Americans that have has employment impacted by Covid-19. We recommend looking into a multitude of options:
COBRA - you can continue your employer-based insurance plan on a month-to-month basis. This may prove to be the most expensive option however as COBRA premiums generally equate to 102% of the total premium. You have 60 days to elect coverage which gives a decent window of time to research your options.
Federal Marketplace Plan - www.healthcare.gov provides health insurance options for those that have lost coverage. Based upon projected 2020 income, you may qualify for substantial financial aid to offset the cost of your insurance plan.
Short-Term Medical Plans - while these plans are affordable, they tend to provide only catastrophic coverage and don’t cover any pre-existing health conditions nor regular doctor visits.
Health Sharing Ministry Plans - an alternative to traditional health insurance, these plans can provide an affordable alternative to offset medical bills. Be sure to read the fine print about pre-existing conditions, virus testing, preventive care, and other common treatments. Most plans only provide reimbursement once so much has been spent out of pocket (e.g. $1,500 or higher)
Direct Primary Care - think of direct primary care as a membership subscription to have unlimited access to your personal primary doctor. Most DPC clinics provide robust telemedicine access and other virtual ways to connect with your doctor on demand.
Rate Guarantees
We are aware of at least one non-medical insurance company that is providing rate guarantees for all benefit plans renewing between May 1 and August 1. This means, no cost increase at renewal for your dental, vision, life, and disability coverages. This is a great opportunity to reach out to your advisors and insurance carriers if you have upcoming policy renewals to extend your current rates for another 12 months.
This article will be updated regularly as more information comes to light. If you have any insights, news, tips, or feedback please email us as info@simparaHR.com and we’ll be glad to consider for inclusion here.
