Group Health Plans and COVID-19 Vaccine Considerations

In general, employers are permitted to require that their employees be vaccinated if no disability or religious exemption applies. With two COVID-19 vaccines already authorized by the FDA for emergency use and more on the horizon, employers need to be aware of how this will affect their group health plans. 

In October 2020, the Trump administration released an interim final regulation (IFR) governing coverage of the COVID-19 vaccine under employer health plans. Simply put, fully or self-insured employer-sponsored group health plans are required to pay the full cost of the vaccine for covered employees at no cost to the employee. 

General preventive service rules

Under the Affordable Care Act (ACA), group health plans and insurers are required to cover certain preventive care services with no cost sharing (also known as “first-dollar coverage”). For a service or item to be classified as preventive, it must be recommended by certain government agencies such as the CDC or the U.S. Preventive Services Task Force (USPSTF). The service or item must then be added to a group health plan as first-dollar coverage starting with the first plan year that commences one year after a governmental agency recommendation is made. Typically, first-dollar coverage is only required when employees obtain care from an in-network provider.

Accelerated coverage for COVID-19 vaccine

Due to the rapid spread nature of COVID-19, Congress voted to significantly shorten the timeline for providing first-dollar coverage for the COVID-19 vaccine. Under the CARES Act, group health plans are required to provide first-dollar coverage of COVID-19 vaccines within 15 business days after a vaccine receives an “A” or “B” recommendation from the USPSTF. In addition, group health plans must include coverage for immunizations recommended by the Advisory Committee on Immunization Practices (ACIP) and adopted by the Director of the Centers for Disease Control and Prevention within 15 business days.

Out-of-network vaccine administration

Group health plans and insurers are required to cover the full cost of the COVID-19 vaccine whether it is administered by an in-network or out-of-network provider.  For out-of-network providers, plans and insurers must pay a “reasonable” reimbursement rate, which is typically the prevailing market rate. A joint interim final rule issued by the Departments of Treasury, Labor, and Health and Human Services stated that the amount paid by Medicare is deemed “reasonable” for this purpose. In addition, COVID-19 vaccination providers are prohibited from balance billing vaccine recipients.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

The following two tabs change content below.

Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

Latest posts by Hall Benefits Law, LLC (see all)

%d bloggers like this: