The coronavirus pandemic understandably has the entire world operating in crisis mode, perhaps nowhere more so at this moment than in the United States. According to the Johns Hopkins Coronavirus Resource Center, as of this writing the U.S. has more than 600,000 confirmed cases of COVID-19 with over 24,000 deaths attributed to the virus. Adding to the shock of those numbers are the facts that a vaccine is still many months away, and social distancing requirements may well remain the norm through the summer.
Understandably, this pandemic has touched virtually every aspect of our daily lives. Our economic and political systems are in a holding pattern. A lucky few of us have been working from home for over a month now. Many more find themselves unemployed or furloughed, while some heroic souls risk their health on a daily basis continuing to work at essential businesses: not only the doctors, nurses, and health care workers caring for the legions of people afflicted with this disease, but also the individuals whose work ensures our society remains functional.
The one-two-punch of marquee legislation in the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act has justifiably bogarted employer’s focus, as we have come to fully appreciate how these new laws will affect employee benefit plans. The FFCRA will spur an influx of claims related to COVID-19 testing which plans have to cover without cost-sharing or deductibles. Two components of the FFCRA, the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, essentially expansions of the Americans with Disabilities Act (“ADA”) and Family and Medical Leave Act (“FMLA”) respectively, greatly expand the leave to which employees are entitled where COVID-19 is involved.
To help fund these expanded employer obligations, Congress included in the FFCRA a number of refundable tax credits for affected employers. Building on this legislation, the CARES Act was designed not only to address the FFCRA’s shortcomings (expanding the coverage of diagnostic testing to capture tests not yet approved by the FDA, taking steps to control pricing, and mandating coverage of preventive services and vaccines), but also to provide emergency relief to a broad swath of individuals, businesses, and state and local governments bearing the brunt of the pandemic’s impact. The effects of these laws are certainly beginning to be felt: the $1,200 payments to individuals have begun being deposited into bank accounts, more and more people have filed claims to tap into expanded unemployment benefits, and businesses small and large are filing applications for a number of loans and grants under the CARES Act to help them cover their payroll and keep up with operating costs.
These steps are by no means the end of Congressional action in response to the current crisis. Just this week, news broke that House Democrats are working on legislation to expand the continuation of coverage provided by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) to employees who are terminated or furloughed by their employer. While COBRA guarantees employees an opportunity to continue their coverage, that coverage is often quite expensive – especially for an individual who has just lost their source of income. The Democratic expansion is intended to cover the full cost of COBRA continuation coverage for terminated and furloughed employees, and would hopefully close a gap in coverage that many experience when seeking coverage through a new employer or on the health insurance exchanges.
More legislation may be necessary to deal with the ongoing pandemic itself, and the unforeseeable knock-on effects that are sure to ripple out from an event of this magnitude. Almost immediately after passage of the CARES Act, Congress began murmuring about the potential of fourth relief package, that could provide more direct payments to taxpayers, expand health insurance for the unemployed, and offer hazard pay for some of the heroic essential employees discussed above.
These blockbuster pieces of legislation are understandably at the top of everyone’s mind right now. Picking these apart to understand how they can be used to benefit employees is key, and forecasts of what new legislation and regulations may be coming to help employers deal with the crisis at hand has its own valuable place. That said, there are a number of other issues simmering in the employee benefits pot beneath the FFCRA and CARES Act that employers should keep an eye on.
Social distancing may be one of the most effective weapons in our arsenal against the coronavirus, but it comes with both an economic and a psychological toll. If they are anything like me, employees working from home are grateful not just for the continued employment, but for the sense of purpose and continuity, the welcome distraction that work provides. Even so, the impact acute stress and isolation can have on employees’ mental health should not be underestimated.
Any employee benefit plan that offers mental health benefits will have to ensure compliance under the Mental Health Parity and Addiction Equity Act (“MHPAEA”), and ensure that it covers those mental health benefits in parity with its medical and surgical benefits. Employers may want to consider parity testing now, as the effects of this crisis will almost certainly lead to a spike in mental health claims in the near future.
While social distancing requirements remain in effect, many employees are accessing their health care providers remotely through telemedicine, chatting with their physicians, nurses, and therapists through a number of video conferencing platforms and telehealth vendors. Importantly, the CARES Act allows high deductible health plans (“HDHPs”) to offer telehealth benefits prior-to participants meeting their deductible without endangering the plan’s HDHP status. Given the circumstances, this is one of the safest and most efficient means by which employees can access care, and employers and plan sponsors should take steps to ensure that their benefit plan language meets their needs and their intent with regard to this class of benefit.
On that note, some videoconferencing platforms, indispensable to businesses continuing to function while their employees work remotely, can give rise to compliance concerns under the Health Insurance Portability and Accountability Act (“HIPAA”), which imposes strict privacy and security requirements on health care providers and employee benefit plans. One platform in particular made headlines recently when an alarming number of incidents were reported of third parties hijacking video feeds to display a variety of vulgar and obscene images and language – some much so that the FBI offered commentary. While the majority of these platforms may themselves be exempt from HIPAA’s requirements, employers and health care providers who use them are still be vulnerable to HIPAA breaches if their use of these platforms improperly discloses PHI. To that end, employers should ensure they take all necessary steps to secure their transmissions over these platforms and reasonably protect against breaches to ensure they maintain compliance.
Another important of aspect of HIPAA with which many employee benefit plans will have to contend is the “source of injury” rule. Read broadly, this rule prohibits plans from excluding any claims that result from a participant’s medical condition or domestic violence, if the plan generally covers treatment for that type of injury or illness. A dark truth of the social distancing measures is that many people’s mental and physical conditions may be exacerbated by their isolation, and an alarming increase in instances of domestic abuse is yet another layer to our current public health crisis. Employers should prepare to see a surge of claims attributable to employee’s medical conditions and domestic violence, review their current plan exclusions, and understand how they may be impacted by the HIPAA source of injury rule.
In the realm of employee benefits, employers must be mindful of where they keep their focus. The big picture right now is often alarming at best, and the scope of the measures being implemented by Congress to address the pandemic is justifiably broad. But the issues described above are but a few of the smaller details that can slip through the cracks if we let them. The response to the coronavirus requires both a macro and micro focus. Don’t miss the forest for the trees, but don’t drift too far in the other direction either.
Nicholas Bonds, Esq., is a member of Phia Group Consulting’s Independent Consultation & Evaluation (ICE) team, working on consultation, plan document review, and regulatory compliance with state and federal laws including ERISA, ACA, HIPAA, COBRA, FMLA and more.