By Greta Cowart
Many employers are wrestling with the impact of the Coronavirus (COVID-19) in the U.S. and its impact on the workforce. Many employers also offer high-deductible health plans (HDHP) that can only cover the specified preventive care until an individual or family satisfies the high deductible set by the health plan.
This morning, the Internal Revenue Service provided relief for employers who want to cover the cost of the COVID-19 diagnostic test and treatment, but who offer health benefits through an HDHP. Notice 2020-15 permits an employer to amend its HDHP to cover all medical services received and items purchased associated with testing for and treatment of COVID-19. It can do so without requiring the individual to meet the HDHP’s deductible or other cost sharing, and it can implement this process without causing the HDHP to fail to qualify as an HDHP and without denying the employee the ability to contribute to a Health Savings Account.
This change is not required under federal tax law. Therefore, employers have the option to choose to adopt it. However, some states have taken steps to require insured plans to provide this coverage. Employers with self-insured plans may consider whether to make such an amendment and, if they so elect, must comply with all of the normal requirements for a change in the benefit plan coverage, such as amendment, SMM distribution, and working with the third-party administrator and any insurance carrier. Employers with fully insured plans that consider such an amendment must contact the insurance company for their plan.
Greta E. Cowart has counseled employers for more than 30 years on best practices in human resources and employee relations issues related to benefits and executive compensation. In her practice, Greta routinely develops strategies for effective administration of claims and other disputes, including defense of grievances, and in litigation considering implications under ERISA, while also considering applicable labor and employment laws. Greta also provides fiduciary training and review of fiduciary operations to improve the documentation of the fiduciary process. Greta is a former chair of the Employee Benefits Committee of the ABA Section of Taxation, and has served on the U.S. Department of Health and Human Services CHIP Working Group.
The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.