EPIC Risk Advisory Bulletin
Volume 1, Issue 3
While some parts of the world are beginning to show signs of recovery from coronavirus, others are still bracing for its full impact. Disruptions continue to ripple around the globe, creating further risk considerations for companies in every industry.
In this issue, we take a focused look into two potential risk implications facing employers:
- Cost-free coronavirus testing in states that have approved it
- Potential FMLA implications related to sending sick employees home from work
The information below is intended to provide a high level overview of critical areas of concern for businesses around coronavirus. Consult your EPIC insurance broker for more in-depth guidance.
Some States Now Require Cost-Free Coronavirus Testing
As fears regarding coronavirus continue to envelop the nation, some states have elected to take proactive measures to ensure that their residents have access to cost-free coronavirus testing. Insurance regulators in multiple states (including California, Maryland, New York, Vermont, and Washington) have now issued mandates that require insured policies issued in those states to offer coronavirus testing free of charge. Specifically, health insurance policies offered in those states must cover coronavirus testing cost-free, without application of any deductibles, copays, or coinsurance.
Additionally, insurance regulators in Oregon have reached an agreement with several insurance carriers to waive costs related to testing. We expect other states will join in this trend over the coming weeks. Regardless of these state mandates, several major insurance carriers have opted to offer testing cost-free.
Impact to Employers with Self-Insured Health Plans
With certain limitations, the Employee Retirement Income Security Act (ERISA) broadly preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by ERISA. Consequently, employers with self-insured health plans are not subject to the coronavirus testing mandates issued by state insurance regulators.
This does not prohibit an employer from voluntarily electing to provide cost-free coronavirus testing under its health plans. At least one third party administrator (TPA) that provides administrative services to self-insured health plans has informed self-funded plan sponsors that it will cover testing cost-free unless a plan opts out of the coverage.
Employers considering offering cost-free coronavirus testing should review their options, including cost considerations, with their TPAs and stop-loss carriers.
Impact on Health Savings Account Eligibility
In order to be eligible to contribute to a Health Savings Account (HSA), individuals must be covered under qualifying high deductible health plan coverage and must not be eligible to receive health benefits on a first-dollar basis under any other health plan. The exception is certain types of permissible coverage including preventive care benefits.
In Notice 2020-15, posted March 11 on IRS.gov, the IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. The IRS also noted that, as in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).
This notice applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their plan.
Can Employers Send Employees Home if They Exhibit Potential Symptoms of Contagious Illnesses at Work? ADA, FMLA and OSHA Considerations
The CDC states that employees who become sick with symptoms of influenza-like illness at work during a pandemic should leave the workplace. Advising such workers to go home is not a disability-related action if the illness is akin to seasonal influenza or the 2009 spring / summer H1N1 virus. Additionally, the action would be permitted under the ADA if the illness were serious enough to pose a direct threat.
An employee who is sick or whose family members are sick may be entitled to leave under the Family Medical Leave Act (FMLA) under certain circumstances. The FMLA entitles eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected leave in a designated 12-month leave year for specified family and medical reasons, which may include the flu where complications arise that create a ‘serious health condition’ as defined by the FMLA.
Leave taken by an employee for the purpose of avoiding exposure to the flu would not be protected under the FMLA. However, employers could encourage employees who are ill or exposed to ill family members to stay home. Additionally, they could consider flexible leave policies for their employees in these circumstances.
There is no specific OSHA standard covering coronavirus (COVID-19). However, OSHA has released a document that provides guidance on preparing workplaces for COVID-19. Some OSHA requirements may apply to preventing occupational exposure to coronavirus. Among the most relevant are:
- OSHA’s Personal Protective Equipment (PPE) standards which require using gloves, eye and face protection, and respiratory protection.
- The General Duty Clause, which requires employers to furnish to each worker “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.”
OSHA has deemed COVID-19 a recordable illness when a worker is infected on the job and recordkeeping requirements apply.
Who Pays for Coronavirus?
Vice President Mike Pence, who has been charged with leading the government’s containment efforts on coronavirus, announced that insurance carriers have agreed to waive copays for diagnosis of the illness. Further, telemedicine related to the disease is also to be covered without any cost to the patient. This is important since potential exposure at hospitals or other treatment facilities is not optimal for the patient or others with comorbidities.
The administration also stated that there would be no surprise billing related to treatments for coronavirus. Self-insured employers seem to be following this directive. A big question mark exists for uninsured Americans who may be exposed. While insurance providers are waiving costs, who will pay if there is no insurance is still unresolved and being debated by President Trump and Congress.
Treatment for those who contract coronavirus seemingly will be covered as any other illness and in all likelihood, indigent uninsured patients would get appropriate care in qualified facilities.
But what about exposure to coronavirus? While officials and many employers are encouraging anyone exposed to the disease to self-quarantine, many Americans lack paid family leave and may not be able to afford missing work. Kaiser Family Foundation reports that 77% of workers earning between $19 and $13.25 per hour have available paid sick leave; 47% of workers in the $13.25 per hour or less wage category have access; and for those earning $10.48 per hour or less this access drops to 30%.
It has been widely publicized that 80% of those contracting coronavirus will have only minor symptoms and others with the disease have been asymptomatic. All of this adds up to many Americans having been exposed, or even contracted coronavirus without knowing it and have therefore continued to work, and expose others.
While $8.3 billion has been authorized by Congress to combat coronavirus, it’s clear that there are unresolved cost considerations only the federal government can solve, and it needs to act quickly.
Our understanding of coronavirus and its impact around the world is constantly evolving. This newsletter briefly touches on issues that businesses may want to consider as they approach their response to coronavirus. More topics will be considered in future issues as our understanding of coronavirus and its impact continues to evolve. Please reach out to your EPIC broker for more information.
For all of EPIC’s coronavirus coverage, visit epicbrokers.com/coronavirus
Disclaimer: This has been provided as an informational resource for EPIC clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, EPIC cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the Centers for Disease Control and Prevention and the World Health Organization. Regarding insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determinations. </small class>
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