As the confirmed cases of Coronavirus (COVID-19) rises in the U.S., more states are issuing directives regarding employee cost-sharing for screening and testing for the virus. Testing for COVID-19 is free if performed by the Centers for Disease Control and Prevention, however, the testing is expected to be offered more broadly by commercial labs.
On March 5, Governor Newsom, of California, joined several other states, including New York, Maryland, and Washington in mandating that insured health plans regulated by the Department of Managed Health Care immediately reduce cost-sharing to zero for all medically necessary screening and testing for COVID-19. Therefore, if a medical professional determines that such screening or testing is advisable, insured medical benefit plans subject to California law may not charge a co-pay or deductible services related with COVID-19, including testing, screening, emergency room visits, and doctor’s visits. Insurers also must ensure that the plan’s advice line/customer service representatives are adequately informed that the plan is waiving cost-sharing as described above and clearly communicate this to participants who contact the plan seeking medically necessary screening and testing for COVID-19. Governor Newsom said, “Californians shouldn’t have to fear a big medical bill just because they took a test for COVID-19.”
The state’s mandate for waiving cost-sharing has limits; the Governor’s order does not cover the treatment of COVID-19, such as hospital stays for more severe cases. This is because the requirements focus on diagnosis, not treatment of COVID-19.
The Governor’s order applies to insured benefits only and does not apply to self-insured plans. ERISA preempts the application of state law to self-funded plans. Cost-sharing requirements for self-funded plans may be banned by the federal government. However, in the meantime, employers with self-funded plans may opt to mirror state law requirements by eliminating cost-sharing for COVID-19 testing, and many insurers are opting to voluntarily eliminate cost-sharing for COVID-19 testing nationwide.