Coronavirus Response and the ACA: What employers should know

Coronavirus Response and the ACA: What employers should know

At a moment when anxiety over coronavirus is paramount, it is worth noting on the Affordable Care Act’s tenth anniversary that it will provide important coverage and access protections in this pivotal moment.

As the coronavirus outbreak puts pressure on the economy, the ACA will provide additional coverage options for those losing their jobs or experiencing large declines in income.

There is so much yet unknown, but as more information is gathered, Health e(fx) is committed to using this blog as a resource for the latest information surrounding COVID-19 and its impact on HR.

Here’s what we know so far.

Coronavirus and high-deductible health plans (HDHPs)
The IRS recently provided important guidance on the use of HDHPs for coronavirus testing and treatment. According to the guidance, HDHPs that cover testing and/or treatment for COVID-19 prior to satisfying a deductible  do not lose their HDHP status.  HR should contact their plan administrator to determine what services their plan will cover prior to deductible. You can learn more here.

IRS extends tax filing and payment deadline for both individuals and employers, but not for Form 1094/1095 IRS filing
We are closely monitoring for any updates around both federal and state submission deadlines for Forms 1094/1095.

At this time, the IRS has not extended the filing deadline for Forms 1094/1095. The submission deadline continues to be March 30, 2020. The filing date for Washington D.C., has also not changed at this point and continues to be June 30, 2020.  New Jersey has extended their 1094/1095 filing date to May 15, 2020.

Paid sick leave wage benefits and employer tax credit
On March 14, the House passed the Families First Coronavirus Response Act to provide paid leave for workers whose homes have been afflicted by the disease and would otherwise have no access to paid time off. The paid medical leave covers two-thirds of an employee’s typical salary over a twelve week time period.

Employers will receive a tax credit of 100 percent of paid sick leave wage benefits that are paid out to their employees.

However, healthcare providers and companies with fewer than 50 employees are exempt from the legislation.  Large companies — those with 500 or more employees — are also exempt from the bill, and while 89% of employees working for these companies have access to sick leave, it may not be enough. Research shows the average employee sick leave is eight days, while experts recommend a quarantine of 14 days for anyone who tests positive for COVID-19.

Freelance workers also have the opportunity to apply for the credit, but that would come in the form of a tax credit.

The Families First Coronavirus Response Act goes in affect on April 2
On March 18, 2020, President Trump signed into law The Families First Coronavirus Response Act (H.R. 6201). The law goes in effect on April 2, 2020 and the provisions below end on December 31, 2020.

This act has extensive provisions but the response to COVID-19 includes:

HEALTH INSURANCE
A group health plan must provide coverage without any cost-sharing requirements, such as deductibles, co-payments and co-insurance, or prior authorization or other medical management requirements, for:

  • The costs of a test to detect or diagnose the virus that causes COVID-19; or
  • Health care provider visits, including telehealth visits, urgent care and emergency room visits, that result in an order for or administration of a test to detect or diagnose the virus that causes COVID-19.
  • 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.
  • States also regulate and set coverage standards for private health plans, although a federal law, ERISA, preempts state regulation of many employer-provided health plans.
  • Within this regulatory framework, private health plans vary, at least to some extent, in terms of their covered benefits, cost sharing, and benefit limits.

BENEFITS
The ACA requires policies in the individual and small group health insurance markets to cover 10 categories of essential health benefits (EHB), including hospitalization, ambulatory care, lab tests, and prescription drugs. However, the details of covered benefits within each category can and do vary from plan to plan – for example, whether the ambulatory care EHB category covers telemedicine visits. In addition, large group health plans and self-insured group health plans of any size are not required to cover EHB, though most provide major medical coverage.

CORONAVIRUS TESTING
The new law passed by Congress requires all group health plans and individual health insurance coverage to cover testing and associated visits related to the diagnosis of the COVID-19 during the emergency period.

EMPLOYER COVERAGE
Employers receive 100% reimbursement for paid leave pursuant to the Act.

  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.

States Reopen ACA Insurance Exchanges to Broaden Health Coverage
At least eleven U.S. states and the District of Columbia are offering a special enrollment period (SEP) for qualified individuals who are currently without insurance in response to the potential growth of coronavirus (COVID-19) cases. This SEP will allow uninsured individuals to enroll in health insurance coverage through MNsure.

Uninsured residents can enroll in ACA plans from now until the deadlines listed below:

      1. California – April 30
      2. Colorado – April 3
      3. Connecticut – April 2
      4. Maryland – April 15
      5. Massachusetts – April 25
      6. Minnesota – April 21
      7. Nevada – April 15
      8. New York – April 15
      9. Rhode Island – April 15
      10. Vermont – April 21
      11. Washington – April 8
      12. The District of Columbia – June 15

California and the District of Columbia were previously opened due to other factors, but uninsured residents concerned about COVID-19 expenses have the opportunity to sign up now. Read more.

ACA eligibility measurement has not changed
As of today, there is no change to ACA eligibility measurement rules. Please read our blog for more information on how to use the look-back method for determining full-time status under the ACA. Read more about measuring eligibility measurements in our blog here.

Stay up to date with the latest information
At Health e(fx) we stand ready to continue to provide you the latest information as well as maintain our services. Please continue to check back to this blog for updates on the latest COVID-19 healthcare happenings, and if you ever have any questions, you can contact us directly.