By: Bryan M. Dunton
Earlier this year, the coronavirus swept through the country and became such a major concern that employers shut down their physical offices and moved their operations remote. Not long after, states began mandating shutdowns and shelter-in-place orders. The overarching theme focused on how to keep everyone safe.
Now, months later, states and employers have begun to relax those restrictions by reopening, albeit in phases. With that, employees have slowly been allowed to return to work in traditional office settings. Given that employers have an interest in the wellbeing of their employees, and would likely face significant business consequences in the event of an outbreak at their place of business, some employers have implemented mandatory return-to-work testing for those employees who come back to the physical office space. On the national level, we have seen this approach implemented in major sports leagues such as the NFL, NBA, and MLB. The idea is essentially to test everyone who enters the building, regardless of whether they are displaying symptoms or have had known exposure.
The expansion and implementation of mandatory return-to-work testing has led to an interesting issue for plan administrators; who bears the cost of covering these tests?
While the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) require health plans to cover the cost of testing for COVID-19, with no cost-share to the participants, during this declared emergency, many plans are asking if they must pay the cost of the employer-mandated return-to-work testing. Seeing as testing costs vary wildly from $20-$850 (or more) per test, and an overall estimated nationwide cost of $6-25 billion annually, we can certainly see why health plans are concerned.
Section 6001 of the FFCRA, as amended by section 3201 of the CARES Act stipulates that in vitro diagnostic testing for COVID-19 must be covered, with no cost-share to participants. Further, this mandate applies to most group health plans, including self-funded plans. The Centers for Disease Control (CDC) recommends testing for the following five populations of people:
Most of these categories deal with either asymptomatic individual or someone who may have been exposed to the virus. The Department of Labor (DOL) issued additional guidance in late June 2020 to clarify that the FFCRA and CARES Act mandate to cover the cost of COVID-19 testing only applies when the testing is medically appropriate. It further clarifies that testing “not primarily intended for individualized diagnoses or treatment of COVID-19” is not within the scope of section 6001.
So here we are. What should a plan do if an employer mandates return-to-work testing for its employees?
You might be surprised by this, but the answer is: it depends. Return-to-work testing is not typically ordered by an attending physician who deems the test medically appropriate for the patient. Rather, it is ordered by the employer, most likely for purpose of public health surveillance to help diagnose individuals in the workplace. This approach can ensure prompt and proper treatment to prevent creating a hot spot and spreading the virus. Some group health plans have opted to cover the return-to-work testing as a precautionary measure to help mitigate the costs of having to treat a larger pool of participants that may become infected with COVID-19.
Plans and employers should also consider any respective state mandates and obligations which may create additional circumstances where testing would be covered. As a final consideration, some mandates could also create a situation where an employer must cover certain testing even if it is not something where the cost can be passed on to the health plan.
Most self-funded group health plans are following the spirit of the law, and we recognize this is a difficult area to navigate as guidelines and mandates are evolving frequently while we all learn more about the virus. Here at the Phia Group, we welcome the opportunity to consult and help self-funded plans contain their costs and ensure the safety and well-being of their participants.