While the country is reeling from more than 130,000 COVID-19 deaths and the most significant recession since the Great Depression, several Republican-led states and the Justice Department are making the case for invalidating the Affordable Care Act (ACA), taking health insurance away from 27 million Americans and leaving at least 54 million with preexisting health conditions potentially uninsurable.

If the case before the Supreme Court — California v. Texas — succeeds, it will be a catastrophic blow for those who rely on the law and its protections, as well as for the millions more who are expected to enroll in Medicaid and marketplace plans this year after they lose employer health benefits along with their jobs.

While the ACA dramatically expanded health insurance, more than 30 million people are still uninsured, a number that has grown under policies advanced by the Trump administration and which recent estimates suggest may climb by 3 million by year’s end as the COVID-19-related recession continues. If the Supreme Court sides with the plaintiffs in California v. Texas, the country faces the possibility that the 30 million uninsured could double to at least 60 million people by this time next year. This would be more — by 10 million people — than were uninsured before the ACA. The wide racial and income inequities in health insurance coverage that have been partly remedied by the law would return. Hospitals and providers, especially safety-net institutions, would struggle with mounting uncompensated care burdens and sicker and more costly patients who are not receiving the preventive care they need.

In a year, the coronavirus will almost certainly still be with us. Will 60 million uninsured people be able to get tested when they need to? How will they pay for treatment if they fall ill with COVID-19? The maker of the experimental drug remdesivir announced in June that it would charge private U.S. insurers $520 per vial or $3,120 for a five-day treatment. If there is a vaccine, how will uninsured people pay for it? And how will they get access to the routine health care that is essential to living a productive and fulfilling life?

For people with minor-to-serious health problems, the law’s preexisting health condition protections have made it possible for them to apply for coverage. Research indicates many people who have fallen seriously ill with COVID will have long-term health problems, including heart and lung damage. These will be considered preexisting conditions that most insurers will decline to cover if the ACA is repealed. Other popular provisions, like the prohibition on annual and lifetime health benefit limits and allowing young adults to stay on their parents’ insurance plans until age 26, also would be repealed. The repeal of the law also could mean the loss of free preventive care, including immunizations, for 150 million people who get coverage through their employers.

The Urban Institute has demonstrated that it is possible to reach universal coverage using the ACA as the foundation. Steps include designing a federal fallback option for states that continue to opt out of Medicaid expansion, enhancing and extending marketplace subsidies, eliminating short-term and other non-ACA-compliant health plans, and autoenrollment. Changes to immigration policy, which has left millions of immigrants uninsured, also would help bring the uninsured rate to zero.

But if the Supreme Court sides with the Trump administration and the states petitioning to strike down the ACA, the nation would have to start from scratch in covering 60 million uninsured people. To date, neither the Trump administration nor Republicans in Congress have offered a replacement in the event the law is repealed. U.S. Health and Human Services Secretary Alex Azar recently said the administration will decide on a plan once the decision is made. Millions of people will be looking to them for answers.

On September 17, 2020, California Governor Newsom signed Senate Bill 1159 into law. The new state law, which has an immediate effect, applies if an employee in California has a COVID-19-related illness during the period beginning March 19, 2020 and ending December 31, 2022. During this period, the employee’s COVID-19-related illness is presumed to arise out of and in the course of employment and will be covered by the state workers’ compensation system if certain additional requirements are met (unless the presumption is controverted by other evidence).

California employers should contact their workers’ compensation carrier for details about the additional requirements that apply under SB 1159 with respect to their workers’ compensation program.

As a result of the new state law, an employee in California who has a COVID-19-related illness that meets certain requirements would look to the state workers’ compensation system for hospital, surgical, medical treatment, and disability benefits, rather than to the employer-sponsored group health and welfare benefit plan.

Employer Action

Whenever an employee in California has a COVID-19-related illness, the employer should coordinate with its workers’ compensation carrier, and the insurance carrier or third-party administrator for its group health and welfare benefit plan, to ensure that the employee obtains hospital, surgical, medical treatment, and disability benefits for the COVID-19-related illness from the appropriate source.

Employees have an extended timeframe to, in part, elect COBRA, make COBRA payments, add dependents, and appeal denials of benefits. As the timeframe may extend beyond the current plan year, in some cases with coverage going into effect retroactively for many months, there are concerns about what gaps in insurance coverage there could be. This may particularly be an issue with stop loss insurance.

Employers must disregard the Outbreak Period, March 1, 2020 until 60 days after the announced end of the National Emergency, for each of the following topics below. At this point, an end to the National Emergency has not been announced, and it should be noted that the announced end date of the National Emergency may not be the same date as the end of the Public Health Emergency period announced by HHS (currently October 23, 2020). For purposes of the below examples, February 28, 2021 is used as the end of the Outbreak Period, but it may end earlier than this date, in which case the following examples are subject to the change.

COBRA: applies to all health plans of employers with 20 or more employees.

• The 60-day election period for a qualified beneficiary to elect COBRA continuation of coverage.
• The date for making monthly COBRA premium payments.
• The date for individuals to notify the plan of a qualifying event or disability determination.

Potential Issues

• An employee fails to make a COBRA premium payment for the month of July 2020 by the end of July (missing the July 1 deadline and grace period under traditional rules). Under new rules, as long as s/he makes the payment by March 30, 2021, his or her July 2020 coverage must be reinstated.
• COBRA is an employer law, not a carrier law. If a participant is seeking coverage retroactively this far in the past, there could likely be a large claim. Will carriers, including stop loss carriers, cover these claims? If so, will the prior carrier or current carrier pay?

Claims for Benefits: applies to all ERISA-covered plans.

• The date within which individuals may file a benefit claim as described under the plan’s terms.

Potential Issues

• An employee did not make a timely claim under traditional rules for a medical service provided in June 2020. S/he could make a claim in April 2021 for reimbursement of the June 2020 expense. The employer has a self-funded plan and switches stop loss carriers effective January 1, 2021.
• Carriers of insured plans and some third-party administrators (“TPAs”) are claims fiduciaries. Who will adjudicate the claim? Will carriers, including stop loss carriers, cover these claims? If so, will the prior carrier or current carrier pay?

Appeals of Denied Claims: applies to all ERISA-covered plans.

• The date within which claimants may file an appeal for an adverse benefit determination. For health and disability claims, a claimant has 180 days, for all other claims 60 days.

Potential Issues

• An employee’s claim for benefits is denied in April 2020. S/he misses the opportunity to appeal, resulting in a lack of exhausting administrative remedies and, thus, the inability to pursue the matter further under traditional rules. Employee appeals in April 2021.
• Carriers of insured plans and some TPAs are claims fiduciaries. Who will adjudicate the claim? If the employee prevails on appeal, will the stop loss carrier cover these claims? If so, does the prior carrier or current carrier pay?

External Review: applies to all non-grandfathered major medical plans.

• The date the claimant may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination.
• The date within which a claimant may file information to perfect a request for external review.

Potential Issues

• An employee’s claim for benefits is denied in April 2020. Employee misses the opportunity to request for an external review. Employee appeals in January 2021.
• Carriers of insured plans and some TPAs are claims fiduciaries. Who will adjudicate the claim? If the employee prevails on appeal, will the stop loss carrier cover these claims? If so, does the prior carrier or current carrier pay?

Below you will find a breakdown of how these rules apply to each line of coverage.

MEDICAL CARRIERS (FULLY INSURED)

All issues may apply:

• COBRA
• Claims for Benefits*
• Appeals of Denied Claims*
• External Review (only non-grandfathered major medical plans)*

MEDICAL STOP LOSS CARRIERS/SELF-FUNDED MEDICAL PLANS

• COBRA
• Special Enrollment Rights
• Claims for Benefits
• Appeals of Denied Claims
• External Review (only non-grandfathered major medical plans).

DISABILITY (ADVICE TO PAY)

• Claims for Benefits
• Appeals of Denied Claims

LIFE INSURANCE, DISABILITY (INSURED)

• Claims for Benefits
• Appeals of Denied Claims

DENTAL, VISION (INSURED)

• COBRA
• Claims for Benefits
• Appeals of Denied Claims

DENTAL, VISION (SELF-FUNDED)

• COBRA
• Claims for Benefits
• Appeals of Denied Claims

* Carriers are claims fiduciaries, but which one will adjudicate claims, should there be a change in carrier? Informal responses from the major medical carriers suggest that, in a fully insured arrangement, the medical carrier at the date of service is responsible for the claims, assuming the extended emergency period timeline is met, premiums were paid, affected claims were for a covered service, and plan requirements are otherwise met.

Employer Action

Employers should consider the following:

For a currently insured medical plan going selffunded (or vice versa):

• Current carrier should adjudicate and pay claims, but best practice would be to so confirm.

For a currently self-funded medical plan remaining self-funded and with the same stop loss carrier and/or TPA at renewal:

• Review stop loss policy terms to determine if there is sufficient coverage (including prior policy runout and run-in provisions of new coverage);
• Best practice to amend SPD to reflect these rules.

For a currently self-funded medical plan remaining self-funded but switching stop loss carriers and/or TPAs at renewal:

• Review stop loss policy terms to determine if there is sufficient coverage (including prior policy runout and run-in provisions of new coverage);
• Best practice to amend SPD to reflect these rules;
• Establish which administrator (current or new) will adjudicate the claims.

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Employee benefit programs and payroll can be a complicated and tedious process considering the number of regulations organizations must abide by. The tasks seem even more daunting for large businesses managing hundreds or thousands of employees. Businesses, small and large, go to great lengths to navigate through the number of benefit and payroll pitfalls on a daily basis.

Designed by highly experienced professionals, Davidow Financial & Insurance Services, Inc. HRIS software program automates complex payroll calculations and compliance checks that would otherwise need to be carried out manually. HR benefit managers can quickly configure their own payroll models and leverage innovative tools that automatically recommends the correct federal, state, and local payroll tax based on where an employee lives and works.

The Benefits of a Unified HR and Payroll software system

The combination of HR and payroll software system can yield extensive benefits on both sides of the equation.

• Benefits to Payroll: HR is probably the first department to be informed when an employee receives a promotion. The HR team springs into action, updating the employee record and making all the necessary changes within their HR software. But what about the payroll team? The promotion likely comes with a pay increase, but how will the payroll department find out about the promotion? Payroll won’t know to update the employee’s compensation unless they are notified separately by that employee’s manager or a member of the HR team. The same concerns arise when an employee has a change of address, marital status, and even more.
• Benefits to HR:On the other side of the equation, HR departments miss out on the payroll data they need to make more strategic talent management decisions when the two systems are not connected. Employee engagement and employee experience are the metrics that every talent team wants to know about because it has proven to be a direct influence on so many business performance outcomes. HR departments look at a number of different factors that affect employee engagement, but without access to their employees’ payroll information, the HR department is missing a key piece of the employee engagement puzzle.

When HR and payroll are performed in one system of record, all of your employees data is ready to be put to work. The insights you are able to collect from a complete set of data gives you the confidence you need to make the right decisions for your business and your people—without having to manually transfer any data. Our mission at Davidow Financial & Insurance Services, Inc. is to deliver an efficient HRIS solutionthat can facilitate both of those processes seamlessly, so that you can focus on strategic decisions to propel your business forward. Combining HR and payroll in one unified HRIS system allows you to get the most value from your technology investment.

We at Davidow Financial & Insurance Services are known to be the most reliable HR service partners to numerous companies across the USA. If you wish to explore elevatingyour HR and Payroll Services of your firm, get in touch with our experts today. Call us at (877) 935-6744 or click here for a quick quote for any of our services.