Last week, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion relief package providing emergency assistance and healthcare response for individuals, families and businesses affected by the 2020 coronavirus (COVID-19) pandemic.
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Health plan sponsors should look more closely at a few of the CARES Act details. Through December 31, 2021, CARES allows HSAs to be used for first-dollar telehealth benefits for any condition without disqualifying the high deductible health plan. Telehealth services are already considered an eligible expense for use with a Health Savings Account (HSA). However, previously these expenses cannot be covered until an individual meets a minimum deductible. This is a bit tricky because most of us think that telemedicine costs around $50 per visit. However, many brick-and-mortar providers are moving their visits from in-person to virtual. The fees are discounted from their normal fee-for-service billing – but are substantially higher than the traditional telemedicine vendors have been charging.
Reversing a change made with the Affordable Care Act (ACA), over-the-counter (OTC) items can now be purchased with pre-tax funds from an HSA, FSA or HRA. The CARES Act would allow individuals enrolled in these pre-tax accounts to pay for OTC drugs and medicines without a prescription. This action helps to reduce additional strain from an already overwhelmed healthcare system. This is a permanent change. And menstrual care products have also been added as an eligible expense. Note that depending on plan language, a plan amendment may be needed to allow these expenses to be reimbursed under FSA or HRA plans.
Another thing to note is that while HSAs can’t be used to pay employer-provided insurance premiums, they can be used by unemployed folks to pay premiums on an independent policy or on coverage through COBRA (The Consolidated Omnibus Budget Reconciliation Act of 1985), which generally provides for extended employer-provided health insurance for employees who have been laid off and would lose their health coverage.
Under ACA rules, termination of employer-provided group insurance is a qualifying event that would permit enrollment in a Marketplace exchange plan. However, even if you didn’t have a loss of coverage, as of this writing, the following states have added a new open enrollment option due to COVID-19:
- District of Columbia
- New York
- Rhode Island
Viewpoints from Craig Hasday
The rules are changing so quickly, and most, if not all changes are pro-consumer. These are stressful times and the rules as we have known them are changing. We are here to help. Just ask us.
President, National Employee Benefits Practice