New IRS Guidance Addresses ARPA COBRA Subsidies and Tax Credits
On May 18, 2021, the IRS published Notice 2021-31 (the “notice”), providing guidance and clarification on the premium assistance and tax credits available for COBRA and state continuation health coverage per the American Rescue Plan Act of 2021 (ARPA). In addition to a summary overview, the notice provides clarification on many issues regarding administering the premium assistance and tax credits, via 86 questions and answers.
The notice states that an individual is not eligible for premium assistance if they do not meet the definition of a qualified beneficiary under federal COBRA. For reference, a “qualified beneficiary” is defined as someone who was a beneficiary under the plan on the day before the qualifying event. COBRA premium assistance is available to individuals who have elected and remained on continuation coverage due to disability, a second qualifying event or an extension under state continuation coverage, so long as the original qualifying event was a reduction in hours or an involuntary termination of employment and to the extent the extended period of coverage falls between April 1, 2021, and September 30, 2021. This supports the idea that spouses and dependents are also eligible for the subsidy, as they are also COBRA qualified beneficiaries.
However, COBRA premium assistance does not apply to the portion of the premium related to continuation coverage for individuals who are not qualified beneficiaries. This means that premiums paid for a spouse or dependent who was not a beneficiary under the plan before the qualifying event are not eligible for premium assistance (since such spouse or dependent is not a qualified beneficiary). In other words, a spouse (or dependent) added to the plan at open enrollment by a COBRA qualified beneficiary is not eligible for premium assistance. Likewise, a domestic partner is not eligible for premium assistance since they are not qualified beneficiaries under federal COBRA.
The notice also touches on an important circumstance that would cause an individual to be ineligible for premium assistance. An individual is not eligible for premium assistance if they are eligible for other group coverage. The notice states that eligibility for other group coverage impacts eligibility for the premium assistance only if the individual is permitted to enroll in that other coverage mid-year. If the individual is locked out of enrollment mid-year due to the lack of a qualifying event, the eligibility for the other coverage is disregarded and the individual is eligible for premium assistance. It is important to note, however, that an individual who lost eligibility for the employer’s plan within the last year due to termination of employment or reduction of hours would still have a HIPAA special enrollment right to enroll in their own or a spouse’s group health plan and would therefore be ineligible for premium assistance.
The notice also states that any late or unpaid premiums for retroactive COBRA continuation coverage elected pursuant to the extension of certain timeframes does not impact an individual’s eligibility for ARPA COBRA premium assistance.
In order to establish that an individual is an assistance eligible individual (AEI), employers may require individuals to provide certification or attestation of their eligibility, although other documentation, such as records showing an individual’s involuntary termination or reduction of hours, may suffice. The notice states that the employer should retain such certification, attestation, or other documentation in order to claim the payroll tax credit.
The notice states that the penalty due from an AEI who fails to provide notice of their eligibility for other coverage under a group health plan or Medicare is not payable to the employer, plan or issuer who receives the premium assistance credit. However, the notice does not provide any additional guidance on how to report this failure or what the procedures will be for investigating or enforcing this violation.
One of the qualifications for eligibility for premium assistance is that an individual must have had a reduction in hours or been involuntarily terminated. Previous guidance did not define what “involuntary termination” meant, other than emphasizing language from the ARPA that excluded instances of voluntary termination. This notice drills down on the concept, providing a definition and several examples to clarify this qualification.
The notice defines involuntary termination as a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services. To determine whether termination is involuntary, a facts and circumstances test is used. The notice provides an example that explains that termination is involuntary, even if it is designated as voluntary, when the facts and circumstances indicate that the individual was willing and able to continue working and but for the voluntary termination, the employer would have terminated the individual (and the individual was aware that the employee would be terminated). Involuntary termination also includes situations where an employee quits because the employer initiates a reduction in hours. Further, it applies to a reduction of hours due to an individual’s choice to be furloughed due to an impending furlough.
The notice applies this definition to various employment agreements. An individual is involuntarily terminated when they volunteer to be terminated and enter into a severance agreement as an alternative to an imminent termination. This analysis applies to retirement too, when the individual chooses to retire as an alternative to an imminent termination. An employer’s decision not to renew an employee’s contract is an involuntary termination if the employment is willing and able to continue the employment relationship. However, it is not considered to be an involuntary termination if all parties always understood that the contract was for specified services over a set term and would not be extended.
The notice applies this analysis to other common situations. Absence from work due to disability or illness is not an involuntary termination unless the employer has taken action to terminate employment (the question of whether a reduction in hours applies will depend on whether the absence causes a loss of coverage). Termination due to general concerns about workplace safety, the health condition of the employee or a family member, or other similar issues, generally will not be an involuntary termination. This is because the actual reason for the termination is unrelated to the action or inaction of the employer.
Note that employees who quit because they don’t have childcare would not be AEIs. However, if they take leave for that reason (while remaining employed), and lose coverage as a result, then they have experienced a reduction in hours that would make them an AEI.
The notice also delves into the types of coverage that can be paid for with premium assistance. An individual who is eligible for other standalone group dental or vision coverage remains eligible for premium assistance for medical coverage. However, whether retiree health coverage will impact eligibility for premium assistance depends on whether the retiree health coverage is offered under the same group health plan as COBRA continuation coverage or under a separate group health plan. An individual is not eligible for premium assistance if offered retiree health coverage that is not COBRA continuation coverage and is coverage under a separate group health plan from the plan under which the COBRA continuation coverage is offered. However, if the retiree health coverage is offered under the same group health plan, the offer of said coverage does not impact eligibility for premium assistance.
The notice clarifies that, even if an employer allows AEIs to enroll in different coverage than what they had the day before the qualifying event, COBRA premium assistance will not be available for coverage with a greater premium. The AEI does not have an option to elect the higher cost coverage and pay the difference.
The notice states that employers must place an AEI in a plan like that provided to active employees if the plan the AEI was enrolled in is no longer offered. It should be noted that those employers who had a decrease in employees such that they are not subject to federal COBRA this year still have to offer COBRA premium assistance based on their status as a larger employer in 2020 (for AEIs who were due an offer of COBRA in 2020).
Duration of Premium Assistance
The ARPA COBRA premium assistance period is generally from April 1, 2021, through September 30, 2021. The notice clarifies that COBRA premium assistance is available, for those who qualify, through the last day of the last period of coverage beginning on or before September 30, 2021, even if the period of coverage extends into October. For example, the last two-week period of coverage for September 2021 is from September 19, 2021, through October 2, 2021. In this case, COBRA premium assistance is available through October 2, 2021.
Extended Election Period
The extended COBRA election period granted by the ARPA has been a source of confusion. However, the notice confirms that an AEI may decline to elect the COBRA continuation coverage under the original COBRA election period and instead elect COBRA continuation coverage only for the extended period of coverage that begins on or after April 1, 2021. In the alternative, if the AEI elects COBRA continuation coverage retroactively, no COBRA premium assistance is available for periods of coverage beginning prior to April 1, 2021.
The notice clarifies that a qualified beneficiary who had a reduction in hours or involuntary termination may elect additional coverage during the extended election period (i.e., medical plan plus standalone vision) if they were enrolled in that coverage prior to the COBRA triggering event. They would qualify as an AEI with respect to all types of coverage elected (i.e., those elected prior to and during the extended election period).
The notice also states that an individual who otherwise would be an AEI except for eligibility for other group coverage or Medicare still has the right to enroll during the extended election period. However, they would not receive premium assistance.
The extensions of certain timeframes available pursuant to last year’s emergency guidance do not apply to the ARPA extended election period notice or the ARPA extended election period. As such, AEIs only have 60 days to elect COBRA and premium assistance under the ARPA provision. And once they have done so, they no longer have the option to elect retroactive COBRA under the extensions of certain timeframes relief.
Entities Entitled to the Tax Credit
The notice reiterates previous guidance that the ARPA COBRA tax credit is claimed by the person to whom premiums are payable (referred to in the notice as the “premium payee”). Generally, the premium payee is the employer for a self-insured plan and for a fully insured plan subject to federal COBRA, the carrier for a fully insured plan subject only to state continuation, and the plan for a multiemployer plan.
The notice discusses the relationship between the employer and the insurer when it comes to the premium subsidy and the tax credit. Notwithstanding an agreement between an employer subject to federal COBRA and its insurer for the insurer to collect COBRA premiums directly from the qualified beneficiaries, the employer remains obligated to pay the premium to the insurer for the months of COBRA premium assistance with respect to an AEI. An employer may not receive the premium assistance credit associated with an insured plan subject solely to state continuation law (e.g., very small fully insured plans) with respect to the requirement to provide continuation coverage, even if the employer pays the full premium to the insurer.
Unless specific circumstances apply, the premium payee receives the premium subsidy tax credit even if it engages a third-party payer (such as a PEO or a reporting agent) to report and pay its federal employment taxes. However, the premium payee must file its own Form 7200 to obtain an advance payment on the credit.
If a third party, such as a charity, pays an AEI’s premium that should have been covered by the subsidy, then the premium payee should reimburse the AEI for the premium, unless the premium payee is aware that the individual assigned the right to the reimbursed premium to the third party.
Whoever the premium payee is, if that premium payee reimburses an AEI for premiums that should have been covered by the subsidy, then the premium payee is entitled to the premium subsidy tax credit on the date the premium payee reimburses the AEI. In addition, the premium payee can get an ARPA COBRA premium subsidy tax credit, but cannot also claim the same premiums as qualifying wages under the FFCRA.
Calculation of the COBRA Premium Assistance Credit Amount
The notice states that the credit amount is generally 102% of the COBRA applicable premium, assuming the employer does not subsidize the COBRA premium for similarly situated qualified beneficiaries who are not AEIs. If the employer does subsidize such cost for non-AEI qualified beneficiaries, then the amount of the credit is 102% minus the amount provided to non-AEI qualified beneficiaries (i.e., the credit does not include the amount of subsidy that the employer would have otherwise provided).
If a plan previously charged less than the allowable 102% COBRA applicable premium rate, the plan may increase the charged amount to 102% of the COBRA applicable premium rate, and the plan can claim a credit for the full 102% amount. This is true even if the employer also provides a taxable severance benefit to the AEI.
The premium assistance credit does not apply to non-AEI COBRA qualified beneficiaries, and the notice has examples of how to calculate the credit where a non-AEI COBRA qualified beneficiary is covered through an AEI.
Claiming the COBRA Premium Assistance Credit
The notice describes the process by which a premium payee claims the tax credit. A premium payee claims the credit by reporting the credit and the number of AEIs receiving the COBRA premium assistance on the designated lines of Form 941, Employer’s Quarterly Federal Tax Return. In anticipation of the credit to which it is entitled, the premium payee may reduce the deposits of federal employment taxes (including withheld taxes) that it would otherwise deposit, up to the amount of the anticipated credit. If the anticipated credit exceeds the federal employment tax deposit amount, then the payee requests an advance of that amount by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.
A premium payee files Form 941 at the end of each quarter but can file a Form 7200 (requesting advance payments) after the end of the payroll period in which the payee became entitled to the credit. However, they cannot file Form 7200 for a period of coverage that has not begun. The notice includes examples, including how to claim premium assistance credit if the payee has no employment tax liability.
A premium payee can still claim the premium assistance credit even if the AEI fails to provide notice that the individual is no longer eligible for the COBRA premium assistance (e.g., the individual is eligible for other group health plan coverage or Medicare), unless the payee has knowledge of the disqualifying coverage/Medicare.
Employers should be aware of the explanations and examples provided by the notice, for them to better understand the requirements placed upon them by the ARPA.
Ninth Circuit Holds California Mandatory IRA Not Preempted by ERISA
the US Court of Appeals for the Ninth Circuit (appellate court) affirmed a lower court's ruling in Howard Jarvis Taxpayers Ass’n v. Cal. Secure Choice Ret. Sav. Program, 2021 WL 1805758 (9th Cir. 2021) that the CalSavers Retirement Savings Program is not preempted by ERISA. Specifically, the appellate court does not consider the program to be an ERISA plan, nor does it place additional requirements on an employer. Under the program, only employers who have chosen not to adopt an ERISA plan would be required to participate.
Beginning June 30, 2020, California employers with more than 100 employees must offer employees a qualified retirement plan (such as a 401(k)) or participate in the state-run retirement savings program known as CalSavers. The requirement applies to employers with 51 to 100 employees on June 30, 2021, and to employers with five or more employees on June 30, 2022. For these purposes, employer size is based on the number of California-based employees reported on the Employment Development Department quarterly report.
Before the applicable deadline, employers must sponsor a qualified retirement plan or register with CalSavers. Under CalSavers, an employer must automatically enroll eligible employees in the retirement program with a contribution of at least 3% of earnings. New employees must be enrolled within 30 days of employment. Employees may choose to opt out of the program.
If an employer fails to comply for up to 90 days, a penalty of $250 per employee could be assessed against the employer. If noncompliance continues, the per-employee penalty could increase to $500.
Employers with five or more employees in California should continue compliance efforts in either maintaining an employer sponsored retirement plan or registering with CalSavers, based on size and applicable effective date.
The ruling will also be of interest to all employers as more than half of the states have either adopted similar programs or have established Task Forces to research the issue. The cities of New York and Seattle have also adopted a similar government-run autoenrollment savings program.
The appellate court’s decision indicates that such plans may not be preempted by ERISA, clearing the way for states to impose these requirements.
What circumstances are considered “involuntary termination” for purposes of eligibility for COBRA premium assistance under ARPA?
An employer must use a facts and circumstances test in order to determine whether termination is involuntary for purposes of COBRA premium assistance eligibility under the American Rescue Plan Act of 2021(ARPA).
The ARPA provides premium assistance for qualified beneficiaries who elect continuation coverage through COBRA, including state continuation programs. To be an assistance eligible individual (AEI), a qualified beneficiary must have experienced a reduction of hours or an involuntary (i.e., employer-initiated) termination of their employment (other than by reason of such employee's gross misconduct) and must also not be eligible for other group health coverage or Medicare. This subsidy covers the entire cost of COBRA premiums and applies to COBRA premiums paid for coverage periods between April 1, 2021, and September 30, 2021 (or when the qualified beneficiary becomes eligible for other group medical or Medicare coverage, whichever date comes first).
On May 18, 2021, the IRS issued guidance related to COBRA premium assistance under the ARPA. This guidance defined involuntary termination as an employer’s unilateral decision to terminate employment when the employee is willing and able to continue performing services. As an example, IRS Notice 2021-31 explains that termination is involuntary, even if it is designated as voluntary, when the facts and circumstances indicate that the individual was willing and able to continue working and but for the voluntary termination, the employer would have terminated the individual (and the individual was aware that they would be terminated).
Since the ARPA was signed into law, how to determine if a termination was in fact involuntary remained unclear in certain circumstances. That said, the notice clarified that:
- Voluntary termination due to general concerns about workplace safety, a health condition of the employee or a family member, or other similar issues generally will not be involuntary termination. This is because the actual reason for the termination is unrelated to the action or inaction of the employer.
- Absence from work due to disability or illness is not an involuntary termination unless the employer takes action to terminate employment. However, this could be a reduction in hours that may give rise to premium assistance if the individual loses coverage as a result of the leave.
- Involuntary termination includes when an individual voluntarily terminates employment due to being offered a severance agreement or imminent termination.
- Generally, retirement is a voluntary termination except for when the facts and circumstances indicate that, absent retirement, the employer would have terminated the individual’s employment and the individual was aware that they would be terminated and was willing and able to continue working.
- Employees who voluntarily terminated employment because they do not have childcare would not be AEIs. However, if such employees remain employed, take leave for that reason, and lose coverage this would be considered a reduction in hours that may make them AEIs.
- Involuntary termination includes a situation where an employee voluntarily terminates employment because of the employer’s material change to the employment relationship such as a reduction in hours or change in geographic location of worksite.
- An employer’s decision not to renew an employee’s contract is an involuntary termination only if the employee is willing and able to continue the employment relationship. However, if all parties always understood that the contract was for specified services over a set term and would not be extended, the completion of the contract without it being renewed is not an involuntary termination.
Not all terminations will fall neatly into the scenarios provided above. As mentioned, whether a termination is considered voluntary will ultimately depend on whether facts and circumstances show that the termination was the employer’s unilateral decision to terminate employment when the employee is willing and able to continue performing services. Clients may need to seek counsel to make such a determination.
May 25, 2021
New Law Extends Relaxed Telehealth Service Requirements
On May 10, 2021, Gov. Lamont signed House Bill 5596 into law. This legislation provides a two-year extension of the relaxed telehealth service requirements that were previously enacted due to the COVID-19 pandemic.
In March 2020, Gov. Lamont enacted emergency Executive Order No. 7G, which suspended certain telehealth limitations to enable more residents to use telehealth services. For example, the order expanded the types of providers and licensed professionals who can provide telehealth services and permitted licensed providers in other states to provide telehealth services to state residents. The order also allowed for the use of audio-only services. For further information on Executive Order No. 7G, please see our April 2, 2020, Compliance Corner article.
In recognition of the benefits of allowing broader access to telehealth services, the recent law extends the relaxed standards through at least June 30, 2023.
Group health plan sponsors may want to be aware of this development.
May 25, 2021
Required Coverage for PANDAS and PANS
On April 27, 2021, Commissioner of Insurance Anderson issued Bulletin 2021-06, informing insurers of the requirement to cover treatment for pediatric autoimmune neuropsychiatric disorders associated with streptococcal infections (PANDAS) and pediatric acute-onset neuropsychiatric syndrome (PANS).
The division expects insurers to notify network providers and covered members of the mandated coverage, to update their administrative processes to enable members to access treatment for PANDAS and PANS, and to identify providers within their networks who can provide PANDAS and PANS services.
This insurance mandate will apply to insured health benefits that are issued or renewed on or after January 1, 2022. Although this mandate applies to insurers, employers should familiarize themselves with it in the event that a participant has questions about this coverage.
Consumer’s Guide to Medicare
On April 26, 2021, Commissioner of Insurance Anderson released Bulletin 2021-05, which includes a publication entitled “A Massachusetts Consumer’s Guide to Medicare.” The guide is meant to be provided alongside the annual federal publication, “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.”
The publication covers the basics on applying for Medicare and is designed to educate individuals on the provisions of Medicare. While this resource does not impact employer plan sponsors, they may want to make it available to employees who may have questions concerning Medicare.
May 25, 2021
Coordination of Group Health Benefits with Medicare
On May 7, 2021, Insurance Commissioner Nicolopoulos issued Bulletin INS 21-028-AB which provides additional guidance to health carriers regarding the coordination of benefits (COB) with Medicare for group health plans.
New Hampshire law prohibits the use of a COB provision to reduce benefits provided under the plan when “a person is or could have been covered under another plan, except with respect to Part B of Medicare.” The Insurance Department interprets the state’s benchmark plan to permit an insurer to reduce group health plan benefits regarding Medicare Part B only. The bulletin further explains that a group health plan may only coordinate benefits with Medicare when Medicare is the primary payer according to federal rules.
While this bulletin is directed at health carriers, employers should be aware of this guidance.
May 25, 2021
Cost Sharing for Behavioral Services Prohibited and Healthcare Affordability Fund Introduced
On April 8, 2021, Gov. Grisham signed SB 317 into law. This statute prohibits cost sharing, including deductibles, for behavioral services covered by health plans issued in the state until January 1, 2027. It also created a fund that is to be used for reducing premiums for low-income citizens who enroll in the state’s exchange and assist small businesses in the state with healthcare costs. It will be financed by increasing the state’s surtax on insurance companies from 1% to 3.75%, replacing a federal fee that was recently phased out.
Employers with plans issued in the state should be aware of the prohibition against cost-sharing for behavioral services. Although the effect of the new fund on rates has not yet been determined, it may affect premiums that carriers in the state charge for health insurance.
Guidance on Recent Legislation Concerning Behavioral Sciences
On May 13, 2021, Superintendent of Insurance Toal issued Bulletin 2021-007, providing guidance for SB 317, which prohibits cost-sharing, including deductibles, for behavioral services covered by health plans issued by state until January 1, 2027. Specifically, the guidance addresses the impact of this statute on high deductible health plans (“HDHPs”) that satisfy health savings account (“HSA”) eligibility requirements on or after January 1, 2022. Superintendent Toal states that SB 317 does not prohibit the sale of plans that meet those requirements.
To be HSA-eligible under the IRC, a healthcare plan must require the insured person to satisfy a specified high deductible before receiving any covered benefits, other than benefits for preventative services. Behavioral services are not currently considered to be preventative services under the IRC, so prohibiting cost-sharing for those services appears to render healthcare plans issued in the state as HSA-ineligible.
However, Superintendent Toal notes that the state encourages the use of HSAs and HDHPs in the state, and this statute does not explicitly prohibit the use of those plans in the state. Since there is no intent to conflict with previous legislation and policy in the state to encourage the use of HSAs and HDHPs, Superintendent Toal concludes that SB 317 does not apply to those plans.
Employers should be aware of this bulletin. Although the superintendent’s position on the applicability of SB 317 to HSAs and HDHPs may influence the enforcement of the state’s law, it may not be binding on the federal government’s enforcement of the IRC. Employers should consult with counsel or their tax advisors concerning the effect of this statute on their HSA and HDHP plans.
May 25, 2021
Reminder of Step Protocol Requirements
On May 11, 2021, Commissioner Mulready issued Bulletin No. LH 2021-01 addressing complaints that insurers are violating a state statute that requires timely responses for requests for exceptions to determinations made in accordance with step therapy protocols mandated by the law.
Under the law, any health insurance plan that utilizes a step therapy protocol must establish guidelines governing the use of the step therapy protocol using clinical practice guidelines. When a health insurance plan restricts prescription drug coverage pursuant to a step therapy protocol, the insurance provider must provide a process for a step therapy exception. A request for an exception must be addressed by the plan within 72 hours. According to the bulletin, some insurers are failing to address these requests.
The commissioner reminds insurers of their responsibilities under the law, as well as their responsibility to grant exceptions when requests are made with supporting documentation sufficient to meet the requirements under the law.
Employers with plans regulated by the state should be aware of this reminder.
Transitional Policies Extended
On May 4, 2021, Commissioner Mulready issued Bulletin No. LH 2021-02, announcing that transitional policies for individual and small group health insurance plans issued in the state may continue until January 1, 2023. Insurers may discontinue these plans at any time, but if they choose to renew them, they can only be renewed for up to 12 months and must end by January 1, 2023.
On January 19, 2021, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans, if the state allows for such an extension. Such transition policies are not required to follow certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit. This bulletin applies this most recent federal extension to the state and allows issuers to renew these non-ACA compliant plans.
Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.
May 25, 2021
Maximum Benefit Adjustment for Autism Spectrum Disorder Coverage
On March 13, 2021, the Department of Insurance published Notice 2021-03. The notice relates to an annual adjustment to the maximum benefit amount for coverage of autism spectrum disorders. According to the notice, for plans/policies issued or renewed in 2022, the maximum benefit is $42,811 (up from $42,220 for plans/policies issued or renewed in 2021). Employers with questions on the maximum benefit should work with their carriers.
May 25, 2021
Extension of Emergency Orders on COVID-19 Testing and Surprise Billing
On May 14, 2021, Commissioner Kreidler issued orders further extending Emergency Orders 20-01 and 20-06. Emergency Order 20-01, which has been extended through June 13, 2021, requires health insurers to waive copays and deductibles for COVID-19 testing. The order also requires insurers to allow a one-time early refill for prescription drugs.
Emergency Order 20-06, which has also been extended through June 13, 2021, protects consumers from receiving surprise bills for lab fees related to COVID-19 diagnostic testing. The order also encourages insurers to report out-of-network labs that are not publishing or honoring the cash price of COVID-19 diagnostic testing.
These orders apply to insurers, but provide employers with information about the continued coverage of COVID-19 testing.
Insurance Protections for Transgender People
On May 12, 2021, Gov. Inslee signed SB 5313 into law, prohibiting health insurers from discriminating against policyholders by denying medical necessary treatment, regardless of their gender expression or identity. The new law comes alongside the Biden administration’s decision to enforce ACA Section 1557 in accordance with the Supreme Court’s Bostock decision.
The new law indicates that individual and small group health insurance plans (including plans on the state exchange) issued on or after January 1, 2022, cannot:
- Deny or limit coverage for gender-affirming treatment when it is medically necessary and prescribed by a medical professional
- Apply categorical cosmetic or blanket exclusions to gender-affirming treatment
Although this law applies to insurers, employers should familiarize themselves with it as it will apply to any plan participants enrolled on plans to which the law applies.
COVID-19 Testing and Telehealth Rules Extended
On April 30, 2021, Commissioner Kreidler extended Emergency Order No. 20-02 until May 30, 2021, requiring that COVID-19 testing be provided without cost sharing or preauthorization and that insurers provide increased flexibility regarding the use of telemedicine.
Employers can notify their plan participants that may still need to receive testing that the testing will continue to be provided without cost-sharing and that telemedicine will still be available.
May 25, 2021
State Healthcare Continuation Forms for ARPA Subsidy
On May 20, 2021, Commissioner Afable issued a bulletin informing insurers in the state of the premium subsidy requirements under the ARPA. The bulletin also announces that forms specific to the state’s healthcare continuation requirements are available.
The ARPA provided a 100% subsidy for federal COBRA and state healthcare premiums for a period from April 1, 2021, to September 30, 2021. The ARPA also required certain notices and forms be distributed to all persons who may qualify for the subsidy; namely, those individuals who either experienced a reduction in hours (voluntary and involuntary) or were involuntarily terminated and are not eligible for other group health plan coverage or Medicare. A discussion of this and other provisions of the ARPA can be found in this article from the March 18, 2021, edition of Compliance Corner. Additional guidance, including a link to the model notices produced by the federal DOL, can be found in this article from the April 15, 2021, edition of Compliance Corner.
The commissioner stated that the state will enforce the requirement that the insurer treat premium assistance eligible individuals as having paid their premium in full. This requirement applies to eligible employees and dependents covered by an insured group health plan subject solely to Wisconsin continuation law. Additionally, if an employer or employee paid or pays continuation premium on or after April 1 on behalf of an assistance eligible individual, the state requires the insurer to refund that premium amount in full by the later of 30-days from the date of this bulletin or receipt of the payment. Finally, the state will not enforce the requirement under Wis. Stat. § 632.897 (8), that the premium be paid by the employee, to simplify the process for an insurer to qualify for the tax credit.
The bulletin also states that employers that are subject to Wisconsin's continuation law must provide the Model ARPA notice for state continuation developed by the US Department of Labor. The state has its own versions of these notices, which apply the state’s healthcare continuation law, and can be found here. Under the state’s healthcare continuation law, a person covered by a healthcare plan regulated by the state can elect to continue that coverage for up to 18 months when that person would lose that coverage for specific qualifying reasons, including involuntarily termination and reduction of hours.
Employers who are fully insured by policies regulated by the state should be aware of this information.
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What circumstances are considered “involuntary termination” for purposes of eligibility for COBRA premium assistance under ARPA?