Ensuring Access to the COVID-19 Vaccine for Enrollees in Private Health Insurance: A Roadmap for States
Sabrina Corlette, Georgetown University Center on Health Insurance Reforms
Update October 29, 2020 — New Federal Rules Governing Private Coverage of COVID-19 Vaccines
On October 28, 2020, the Departments of Health & Human Services, Treasury, and Labor (the “Departments’) published an interim final rule (IFR) clarifying the obligations of health plans and insurers with respect to coverage of COVID-19 vaccinations. Specifically, the IFR requires health plans and insurers to:
- Cover and waive cost-sharing for COVID-19 vaccines that have been recommended by ACIP, regardless of whether CDC has placed them on the Immunization Schedules for routine use.
- Cover and waive cost-sharing for both the immunization and its administration, even if the provider bills separately for the services, so long as the primary purpose of the encounter was delivery of the COVID-19 vaccine.
- Cover and waive cost-sharing for vaccines delivered by out-of-network providers. Further, plans and insurers must reimburse such out-of-network providers at a “reasonable” rate, as determined in comparison to prevailing market rates. The Departments note that providers who participate in the CDC COVID-19 Vaccination Program contractually agree to administer a COVID-19 vaccine regardless of an individual’s ability to pay and are barred from balance billing a vaccine recipient.
The requirements in the IFR go into effect immediately and last for the duration of the public health emergency. The Departments are seeking public comment on these and other provisions of the rule; these are due within 60 days after publication in the Federal Register.
Original Post — October 27, 2020
Several COVID-19 vaccines could be on the market soon. State and federal officials have begun devising strategies for distributing and administering the vaccine and communicating with the public, but an equally important element will be the extent to which health care payers, including private insurers, will cover the costs for recipients. The Affordable Care Act (ACA) requires that most health insurers and employer health plans cover certain preventive services without cost-sharing, including vaccines recommended by the Advisory Committee on Immunization Practices (ACIP). However, ensuring that a COVID-19 vaccine is a free preventive service for all who need it, when they need it, is by no means guaranteed. This expert perspective discusses recent federal efforts to expand private insurance coverage of a vaccine, and provides a roadmap for states to close remaining coverage gaps that could inhibit vaccine uptake.
Vaccine Coverage Requirements under the ACA, as Amended by the CARES Act
The ACA requires most employer and individual market health plans to cover and waive cost-sharing (such as a deductible, co-payment, or coinsurance) for certain recommended preventive services. These include immunizations for “routine use” in children and adults that have been recommended by ACIP; vaccines are only considered to be for routine use if they are listed on the Immunization Schedules of the Centers for Disease Control & Prevention (CDC).
The ACA gave plans and insurers up to two years to cover a vaccine, following the ACIP recommendation. It was for this reason that the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, accelerated the timetable with a provision requiring insurers and employer plans to cover COVID-19 vaccines within 15 days after a recommendation from ACIP.
Other limitations in current law could leave consumers without full coverage of the vaccine:
- The ACA requirement applies only to ACA-compliant health plans. Grandfathered plans, short-term plans, health care sharing ministries, Farm Bureau plans, and certain other forms of health insurance are not required to cover the vaccine at all, let alone waive enrollee cost-sharing. Although comprehensive data is not available, these alternative forms of coverage appear to be quite prevalent. For example, 14 percent of workers with job-based coverage are in a grandfathered plan, while at least 4-5 million individuals are enrolled in a short-term plan or sharing ministry arrangement.
- Health plans are not required to cover preventive services, including immunizations, delivered by an out-of-network provider, if an in-network provider is available to deliver the same service. If a consumer receives the vaccine from a clinic, urgent care center, or other provider who does not participate in their health plan’s network, they could find themselves responsible for the cost, in whole or in part.
- If the provider charges the insurer separately for both an office visit and administration of the vaccine, the insurer is prohibited from imposing cost-sharing for the vaccine administration, but can impose cost-sharing for the office visit. Similarly, if the primary reason of the patient’s visit is for something other than receiving the vaccine, the patient may be charged for the visit.
- Consumers who receive the vaccine in hospital-owned facilities or practices could face “facility fees,” meaning charges that are added to the bill to cover the cost of maintaining the facility. Not all health plans will cover these fees, leaving the policyholder to pay any outstanding balance, which can sometimes be hundreds of dollars.
Filling Potential Gaps in Vaccine Coverage: State Options
As the primary regulators of health insurance, state departments of insurance (DOIs) are responsible for interpreting and enforcing federal insurance laws, including the preventive services provision of the ACA. They may also hold insurers to higher standards than under federal law. Absent additional federal efforts to expand private coverage of COVID-19 vaccines, states may wish to consider the following legislative or regulatory actions:
- Require or encourage immediate first-dollar coverage. The ACA requires health plans to cover and waive cost-sharing for vaccines only after they are recommended by ACIP, but states can require coverage to go into effect immediately upon FDA approval. Just as many states required or encouraged insurers to cover and waive cost-sharing for COVID-19 testing early in the pandemic, they can do the same for vaccines. Several states already have, including D.C., Maine, Maryland, and Rhode Island.
- Require non-ACA compliant products to cover a COVID-19 vaccine. States have authority to regulate grandfathered and short-term plans and other insurance or insurance-like arrangements that do not comply with the ACA. State legislatures can require these insurers or organizations to cover and waive cost-sharing for COVID-19 vaccines.
- Require or encourage out-of-network coverage. State vaccine distribution plans may include non-traditional sites of vaccine administration. States should ensure that consumers receiving the vaccine from a provider who is not in their plan network do not face unanticipated cost-sharing or balance bills. States that have already implemented balance billing protections may need to amend their law or regulations to make sure that they cover COVID-19 vaccinations. States without balance billing laws may want to require insurers to cover and waive cost-sharing for out-of-network vaccine administration, and may also need to prohibit those providers from balance billing patients.
- Prohibit, or require disclosure of, facility fees. States can prohibit hospital-owned providers from charging facility fees when the service provided is vaccine administration. At a minimum, states can require providers to notify consumers, prior to any vaccine administration, about any fees their insurer may not pay for.
A state mandate to cover and waive cost-sharing for a vaccine, prior to implementation of a federal mandate, or requirements to cover out-of-network administration, will be limited by ERISA, the federal law preempting state regulation of self-funded employer health plans. Future action by Congress to accelerate the timeline between regulatory approval of a vaccine and coverage by private health plans would complement any state efforts, as would federal legislation to prohibit surprise balance billing by out-of-network providers.
 KFF, “Employer Health Benefits: 2020 Annual Survey,” September 2020. Available at: http://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf; U.S. House of Representatives Committee on Energy & Commerce, “Shortchanged: How the Trump Administration’s Expansion of Junk Short-Term Health Insurance Plans is Putting Americans at Risk,” June 2020. Available at https://drive.google.com/file/d/1uiL3Bi9XV0mYnxpyaIMeg_Q-BJaURXX3/view; Alliance of Health Care Sharing Ministries, Data and Statistics. Available at http://ahcsm.org/about-us/data-and-statistics/.