CARES Act FAQs Released By HHS, Clarifying Certain Vaccine Questions

On Monday, October 4, 2021, the Department of Health and Human Services (HHS) issued updated FAQs pertaining to the implementation of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and the Affordable Care Act (ACA). Elaborating on existing guidance from HHS, the Department of Labor (DOL), and the Treasury, the major takeaways from the new FAQs focus exclusively on the COVID-19 vaccine.

Featuring five new questions and corresponding answers, of particular importance is the clarification remarked upon in Q4 of the guidance, which explains that employer-sponsored group health plans are not permitted to deny benefits to employees simply because they have not received the COVID-19 vaccine. Specifically, the answer to Q4 illustrates that “plans and issuers may not discriminate in eligibility for benefits or coverage based on whether or not an individual obtains a COVID-19 vaccination.”

Although, employers are permitted to provide premium discounts to plan participants who do get the vaccine, as mentioned in Q3 of the guidance. As we have previously mentioned , since requiring an individual to complete a certain activity related to a health factor constitutes an activity-based wellness program, the premium discount being offered will need to comply with the requisite wellness program regulations, i.e., offer a reasonable alternative standard (RAS) to participants to qualify and allow individuals who are unable to receive the vaccine due to medical reasons the ability to opt out without penalty. Interestingly, the new FAQs do not mention plan participants with sincerely held religious beliefs. From an administrative perspective, any premium discount the plan offers “must not exceed 30 percent of the total cost of employee-only coverage and must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year.” Essentially, plans may not charge employees more than a certain percentage of their household income.

Further, Q5 of the updated FAQs addresses the treatment of premium discounts and surcharges surrounding the COVID-19 vaccine for the purposes of determining affordability of coverage under the Section 4980H(b) employer shared responsibility rules. This answer provides some clarity for a question that has been posed by countless employers, all hoping to obtain a better grasp on exactly how the vaccine will affect their group health plans’ affordability rates. The FAQs note that “wellness incentives that relate to the receipt of COVID-19 vaccinations are treated as not earned for purposes of determining whether employer-sponsored health coverage is affordable”, meaning that they are treated differently than incentives related exclusively to the use of tobacco products, for instance, when calculating an employee’s required contribution amount for an offer of health coverage. For example, as provided in the guidance, if a plan were to reduce the individual premium contribution under a wellness program that factors in the COVID-19 vaccine by 25 percent, the reduction would be disregarded for determining ACA affordability. Conversely, if there were to be a 25 percent increase levied upon an unvaccinated individual, the surcharge would not be disregarded when making the affordability assessment.

We will continue to monitor the situation for any updates and provide more guidance as applicable. For additional support you may contact your AssuredPartners Account Manager or Sales Executive. Employers may wish to consult with Labor/Employment counsel to ensure that their Labor practices are consistent with the ADA, GINA, and EEOC guidance. 

Additional Links:

·       September 10, 2021 – Biden’s Vaccine Mandate and Delta’s Surcharge Signal Sweeping Changes for Employers and Employees

·       August 19, 2021 – Vaccine Mandates and the Workplace: Where We Stand Currently

·       June 29, 2021 – EEOC Provides Updated Guidance on COVID-19 Vaccine Incentives

·       March 18, 2021 – Employer Provided COVID Vaccines Part II

·       February 24, 2021 – EEOC Provides Guidance on Workplace COVID-19 Vaccination Requirements

·       January 8, 2021 – Update on COVID – Progression and Vaccines

·       December 12, 2020 – COVID Vaccinations are Coming, What Does it Mean for my Self-Funded Health Plan