COVID-19 and Private Health Insurance Coverage: Frequently Asked Questions
Released: 2020-05-15T00:00:00

Introduction

The Coronavirus Disease 2019 (COVID-19) pandemic is affecting communities around the world and throughout the United States, with case counts growing daily. As private health insurance is the predominant source of health coverage in the United States, there is considerable congressional interest in understanding private health insurance coverage of health benefits related to COVID-19 diagnosis, treatment, and prevention.

This report addresses frequently asked questions about covered benefits and consumer cost sharing related to COVID-19 testing, treatment, and a potential vaccine. It discusses recent legislation, references relevant existing federal requirements and recent administrative interpretations of them in relation to COVID-19, and notes state and private-sector actions. It begins with background information on types and regulation of private health insurance plans.

The Families First Coronavirus Response Act (FFCRA; P.L. 116-127 ) requires specified types of private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services, without consumer cost sharing. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ) further addresses private health insurance coverage of COVID-19 testing, and requires coverage of a potential vaccine and other preventive services without cost sharing, if they are recommended by specified federal entities. There are no federal requirements that specifically require coverage of COVID-19 treatment services. However, one or more existing federal requirements are potentially relevant, as discussed in this report. Some states have also announced requirements related to covered benefits and consumer costs, and some insurers have reported that they will voluntarily cover certain relevant benefits.

This report discusses most U.S. private health insurance plans' coverage of health care items and services related to COVID-19, but it generally does not discuss the delivery of those services, insurers' payments to health care providers, or private health insurance coverage of other benefits. The Appendix lists Congressional Research Service (CRS) analysts who can discuss with congressional clients other topics of interest related to private health insurance and COVID-19, including types of plans and coverage of benefits not addressed in this report. Also beyond the scope of this report are public health coverage programs (e.g., Medicare); the domestic and international public health responses to COVID-19; and economic, human services, and other nonhealth issues. For further information on these topics, congressional clients can access the CRS Coronavirus Disease 2019 resources page at https://www.crs.gov/resources/coronavirus-disease-2019 .

The information in this report is current as of its publication date and may be superseded by subsequent congressional or administrative action. Congressional clients may contact the report author and/or the experts listed in the Appendix for questions about further developments. In addition, Centers for Medicare & Medicaid Services (CMS) guidance related to private health insurance and COVID-19 is compiled on its website.

Background on Private Health Insurance

The private health insurance market includes both the group market (largely made up of employer-sponsored insurance) and the individual market (which includes plans directly purchased from an insurer). The group market is divided into small- and large-group market segments; a small group is typically defined as a group of up to 50 individuals (e.g., employees), and a large group is typically defined as one with 51 or more individuals. Employers and other group health plan sponsors may purchase coverage from an insurer in the small- and large-group markets (i.e., they may fully insure ). Sponsors may instead finance coverage themselves (i.e., they may self-insure ). The individual and small-group markets include plans sold on and off the individual and small-group health insurance exchanges, respectively.

Covered benefits, consumer costs, and other plan features may vary by plan, subject to applicable federal and state requirements. The federal government may regulate all the coverage types noted above (i.e., individual coverage, fully insured small- and large-group coverage, and self-insured group plans), and states may regulate all but self-insured group plans. Federal and state requirements may vary by coverage type.

This report focuses on private-sector plans explained above. There are some variations of these coverage types, and there are other types of private health coverage arrangements, which may or may not be subject to the requirements discussed in this report, or for which there may be other policy questions related to COVID-19. These other coverage types are out of the scope of this report, but a number of them are identified in the Appendix , along with resources for further information.

One coverage variation, grandfathered plans , is included in this report because it is explicitly referenced in legislation relevant to COVID-19 and private health insurance coverage. Grandfathered plans are individual or group plans in which at least one individual was enrolled as of enactment of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended), and which continue to meet certain criteria. Plans that maintain their grandfathered status are exempt from some, but not all, federal requirements.

Another type of coverage, short-term, limited duration insurance (STLDI or STLD plans), is also included in this report, because it is explicitly excluded from a coverage definition cited by relevant legislation. STLDI is coverage, generally sold in the individual market, which meets certain definitional criteria. The statutory definition of "individual health insurance coverage" excludes STLDI; thus, STLDI is exempt from complying with all federal health insurance requirements applicable to individual health insurance plans.

FAQ: COVID-19 Covered Benefits and Cost Sharing

The remainder of this report addresses private health insurance coverage of COVID-19 testing, treatment, and vaccination, when a vaccine becomes available. Where there are federal requirements related to such coverage, it is useful to understand the following:

Is the service or item required to be covered? If so, is cost sharing allowed? In general, private health insurance cost sharing includes deductibles, coinsurance, and copayments. Are plans allowed to impose prior authorization or other medical management requirements? For example, some insurers require that they (the insurer) provide prior authorization for routine hospital inpatient care, and/or require that primary care physicians provide approval or referrals for specialty care, as a condition for covering the care. Does the coverage requirement depend on how or where the service or item is furnished (e.g., by an in-network versus out-of-network provider)? Under private insurance, benefit coverage and consumer cost sharing is often contingent upon whether the service or item is furnished by a provider that the insurer has contracted with (i.e., whether that provider is in network for a given plan). In instances where a contract between an insurer and provider does not exist, the provider is considered out of network . When does the coverage requirement go into effect? What types of plans are subject to the coverage requirement?

To the extent that information is available, these issues are addressed with regard to private health insurance coverage of COVID-19 testing, treatment, and vaccination. Table 1 summarizes key information.

Are Plans Required to Cover COVID-19 Testing?

FFCRA and CARES Act

Prior to the enactment of the FFCRA ( P.L. 116-127 ), there were no federal requirements specifically mandating private health insurance coverage of items or services related to COVID-19 testing.

Section 6001 of the FFCRA requires most private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services, as defined in the act. Per FFCRA, the coverage must be provided without consumer cost sharing, including deductibles, copayments, or coinsurance. Prior authorization or other medical management requirements are prohibited.

The definition of testing that must be covered was expanded by Section 3201 of the CARES Act ( P.L. 116-136 ). In addition, the Department of Labor (DOL), Department of Health and Human Services (HHS), and the Treasury issued an FAQ document on April 11, 2020 (hereinafter, "Tri-Agency April 11 FAQ"), on the private health insurance coverage requirements in FFCRA and the CARES Act. Together, the acts and guidance require coverage of certain tests and services, as summarized below.

Specified COVID-19 diagnostic tests, including both molecular (e.g., polymerase chain reaction, or PCR, tests) and serological tests (i.e., antibody tests), and the administration of such tests are covered. "Items and services furnished to an individual during [visits, as specified below] that result in an order for or administration of [an applicable COVID-19 test], but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product." This definition could encompass additional diagnostic testing associated with the visit. However, it would not encompass treatment for COVID-19-associated illnesses.

The coverage requirements apply to the specified items and services when furnished at visits including to health care provider offices, urgent care centers, emergency rooms, and "nontraditional" settings, including drive-through testing sites. The requirements apply to both in-person and telehealth visits.

FFCRA does not specify whether its coverage requirements apply when the test is furnished by an out-of-network provider. However Section 3202 of the CARES Act addresses insurer payments to in-network and out-of-network providers. In addition, the Tri-Agency April 11 FAQ clarifies that the FFCRA coverage requirements apply both in network and out of network.

The coverage requirements in FFCRA apply only to the specified items and services that are furnished during the COVID-19 public health emergency period described in that act, as of the date the FFCRA was enacted (March 18, 2020).

These requirements apply to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. This includes grandfathered individual or group plans, which are exempt from certain other federal private health insurance requirements. Per the definition of individual health insurance coverage cited in the act, the requirements do not apply to STLDI.

State and Private-Sector Actions

In recent weeks, some states have announced coverage requirements, and some insurers have clarified or expanded their policies, regarding coverage of COVID-19 testing, among other services. However, states cannot regulate self-insured plans, and insurer announcements do not necessarily apply to those plans either. FFCRA does apply to self-insured group plans in addition to the other plan types discussed above.

To the extent that state requirements about or plans' voluntary coverage of COVID-19 testing did not extend as far as FFCRA and CARES Act requirements, the federal laws supersede them. However, state requirements and plans' voluntary coverage may exceed applicable federal requirements, as long as they do not prevent the implementation of any federal requirements.

Even though federal law now requires most plans to cover specified COVID-19 testing services without cost sharing, it may be useful for consumers to contact their insurers or plan sponsors to understand their coverage. Subject to applicable federal and state requirements, coverage of the COVID-19 test and related services and items may vary by plan.

Are Plans Required to Cover COVID-19 Treatment?

Essential Health Benefits Guidance on COVID-19 Coverage

Although FFCRA requires certain plans to cover specified COVID-19 testing services without cost sharing, neither FFCRA nor the CARES Act mandates coverage of COVID-19 treatment services. There is no federal requirement specifically mandating private health insurance coverage of items or services related to COVID-19 treatment. However, one or more existing federal requirements are potentially relevant, subject to state implementation and plan variation.

There is a federal statutory requirement that certain plans cover a core set of 10 categories of essential health benefits (EHB). However, states, rather than the federal government, generally specify the benefit coverage requirements within those categories. Current regulation allows each state to select an EHB-benchmark plan. The benchmark plan serves as a reference plan on which plans subject to EHB requirements must substantially base their benefits packages. Because states select their own EHB-benchmark plans, there is considerable variation in EHB coverage from state to state.

On March 5, 2020, and March 12, 2020, CMS issued guidance addressing the potential relevance of EHB requirements to coverage of COVID-19 treatment, among other benefits, subject to variation in states' EHB-benchmark plan designations. According to the March 12 document, "all 51 EHB-benchmark plans currently provide coverage for the diagnosis and treatment of COVID-19" (emphasis added), but coverage of specific benefits within the 10 categories of EHB (e.g., hospitalization, laboratory services) may vary by state and by plan.

The March 12 document suggests that coverage of medically necessary hospitalizations would include coverage of medically necessary isolation and quarantine during the hospital admission, subject to state and plan variation. Quarantine in other settings, such as at home, is not a medical benefit. The document notes, "however, other medical benefits that occur in the home that are required by and under the supervision of a medical provider, such as home health care or telemedicine, may be covered as EHB," subject to state and plan variation.

The March 12 document confirms that "exact coverage details and cost-sharing amounts for individual services may vary by plan, and some plans may require prior authorization before these services are covered." In other words, even where certain treatment items and services are required to be covered as EHB in a state, cost-sharing and medical management requirements could apply, subject to applicable federal and state requirements. In addition, cost sharing and other coverage details may vary for services furnished by out-of-network providers.

Individual and fully insured small-group plans are subject to EHB requirements. Large-group plans, self-insured plans, grandfathered plans, and STLDI are not.

Whether or not certain treatment services are defined as EHB in a state, other state benefit coverage requirements may be relevant to COVID-19 treatment. Plans may also voluntarily cover benefits. See " State and Private-Sector Actions " below.

Certain Federal Requirements Related to Cost Sharing

Other existing federal requirements are also relevant to consumer cost sharing on COVID-19 treatment services, to the extent that such treatments are covered by the consumer's plan, and largely to the extent that they are defined by a state as EHB.

For example, plans must comply with annual l imits on consumers' out-of-pocket spending (i.e., cost sharing, including deductibles, coinsurance, and copayments) on in-network coverage of the EHB. If certain treatment services are defined as EHB in a state, and are furnished by an in-network provider, consumers' out-of-pocket costs for the plan year would be limited as discussed below. If certain treatment services are not defined as EHB in a state, and/or are furnished by out-of-network providers, this out-of-pocket maximum would not necessarily apply.

In 2020, the out-of-pocket limits cannot exceed $8,150 for self-only coverage and $16,300 for coverage other than self-only. This means that once a consumer has spent up to that amount in cost sharing on applicable in-network benefits, the plan would cover 100% of remaining applicable costs for the plan year.

The out-of-pocket maximum applies to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. The requirement does not apply to grandfathered plans or STLDI.

State and Private-Sector Actions

As stated above, in recent weeks, some states have announced coverage requirements related to COVID-19 testing services and items, and some insurers have clarified or expanded their policies to include relevant coverage. Some of these state and insurer statements also address coverage of treatment services. However, as discussed above, states cannot regulate self-insured plans, and insurer announcements do not necessarily apply to those plans either.

Coverage, cost sharing, and the application of medical management techniques (e.g., prior authorization) can vary by plan, subject to applicable federal and state requirements. It may be useful for consumers to contact their insurers or plan sponsors to understand their coverage of services and items related to COVID-19 treatment.

Will Plans Be Required to Cover a COVID-19 Vaccine?

CARES Act and Existing Preventive Services Coverage Requirements

As of the date of this report, there is no vaccine against COVID-19 approved by the Food and Drug Administration (FDA) for use in the United States, although several candidates are in development. Prior to the enactment of the CARES Act, there were no federal requirements specifically mandating private health insurance coverage of items or services related to a COVID-19 vaccine.

However, per an existing federal requirement (Â§2713 of the Public Health Service Act [PHSA]) and its accompanying regulations, most plans must cover specified preventive health services without cost sharing. This includes any preventive service recommended with an A or B rating by the United States Preventive Services Task Force (USPSTF); or any immunization with a recommendation by the Advisory Committee on Immunization Practices (ACIP), adopted by the Centers for Disease Control and Prevention (CDC), for routine use for a given individual. These coverage requirements apply no sooner than one year after a new or revised recommendation is published.

Requirements of PHSA Section 2713 apply to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. The requirements do not apply to grandfathered plans or to STLDI. By regulation, plans are generally not required to cover preventive services furnished out of network. They are allowed to use "reasonable medical management" techniques, within provided guidelines. Cost sharing for office visits associated with a furnished preventive service may or may not be allowed, as specified in regulation.

Section 3203 of the CARES Act requires specified plansâthe same types as those subject to PHSA Section 2713âto cover a COVID-19 vaccine, when available, and potentially other COVID-19 preventive services, if they are recommended by ACIP or USPSTF, respectively. This coverage must be provided without cost sharing. Section 3203 also applies an expedited effective date for the required coverage: 15 business days after an applicable ACIP or USPSTF recommendation is published. Otherwise, requirements of Section 3203 mirror the existing requirements under PHSA Section 2713. The requirement to cover COVID-19 vaccination and other preventive services is not time limited, whereas the FFCRA requirement to cover COVID-19 testing is limited to the duration of a declared COVID-19 public health emergency. See " Are Plans Required to Cover COVID-19 Testing? "

State and Private-Sector Actions

Some of the state and insurer announcements about coverage of COVID-19 benefits, discussed earlier in this report, reference coverage of a potential vaccine. However, pending development and approval of the vaccine, and pending the implementation of the CARES Act requirements related to COVID-19 vaccine coverage, it is premature to discuss potential variations in coverage of the vaccine at the state or plan level. It may still be useful for consumers to contact their insurers or plan sponsors to understand their coverage of services and items related to a potential COVID-19 vaccine.

Appendix. Resources for Questions about Private Health Insurance and COVID-19

This report has focused on coverage of COVID-19 testing, treatment, and vaccination by most types of private health insurance plans. CRS analysts are also available to congressional clients to discuss other topics of interest related to private health insurance and COVID-19, including

coverage of COVID-19 benefits by types of private plans not specifically addressed in this report; other issues related to private coverage of COVID-19 benefits; private coverage of certain other benefits of concern during this pandemic, or of services furnished via telehealth; and issues related to private health insurance enrollment and premium payments.

The following table lists examples of such topics of interest, any relevant legislative or administrative resources, any relevant CRS resources, and names of appropriate CRS experts for the benefit of congressional clients. Besides the CRS reports listed below that provide background on relevant topics, also see CRS reports on health provisions in recent COVID-19 legislation:

CRS Report R46316, Health Care Provisions in the Families First Coronavirus Response Act, P.L. 116-127 , and CRS Report R46334, Selected Health Provisions in Title III of the CARES Act (P.L. 116-136) .

The information in this report is current as of its publication date and may be superseded by subsequent congressional or administrative action. Congressional clients may contact the report author and/or experts listed below for questions about further developments. In addition, CMS guidance related to private health insurance and COVID-19 is compiled on its website.