This article was first published on December 4, 2020.

Updated 12/21/20: On December 18, 2020, the CDC approved the Moderna COVID-19 vaccine for emergency use authorization. Distribution of the vaccine will begin on Monday, December 20, 2020.

On Sunday, December 20, 2020, the CDC ACIP panel voted on their recommendations for which groups should be prioritized for COVID-19 vaccination after the Phase 1a group (healthcare workers and long term care facility residents). The ACIP recommended that “frontline essential workers” and individuals 75 and older (Phase 1b group) should be next in line, followed by “other essential workers,” people between the ages of 65 and 74, and people between the ages of 16 and 64 who have high-risk underlying medical conditions (Phase 1c group).

Updated 12/18/20: On December 16, 2020, the Equal Employment Opportunity Commission (EEOC) released guidance on how employers can mandate COVID-19 vaccinations in compliance with federal workplace anti-discrimination laws (including the Americans with Disabilities Act, Title VII of the Civil Rights Act, and the Genetic Information Non-Discrimination Act). For a comprehensive review of the EEOC’s guidance, see our blog.

Updated 12/14/20: On December 11, 2020, the FDA granted an emergency use authorization for the Pfizer/BioNTech vaccine. The vaccine is being distributed to all 50 states and vaccinations can begin immediately.

As we continue to hear news of a COVID-19 vaccine roll out, we wanted to re-visit what employers and group health plans should consider. It is important to note that information on the COVID-19 vaccine and its distribution continue to change daily and the information contained in this article may be subject to changes based on new regulatory guidance.

Compliance Snapshot:

  1. The COVID-19 vaccines produced by Pfizer and Moderna have been approved for emergency use authorization by the U.S. Federal Drug Administration (FDA).
  2. Vaccines will be provided to certain at-risk populations first. Though the states have authority over vaccine distribution, the Centers for Disease Control (CDC) recommends that health care workers and long-term care residents receive the vaccine first.
  3. All non-grandfathered group health plans are required to cover COVID-19 vaccinations and any associated item or service without cost sharing within 15 days of a recommendation by relevant federal bodies.

COVID-19 Vaccines and Distribution

The COVID-19 vaccines produced by Pfizer/BioNTech and Moderna have been approved for emergency use with the Food and Drug Administration (FDA). The vaccine distribution has begun and 40 million doses (enough to immunize 20 million individuals) are expected to be available for distribution by the end of December 2020.

The vaccine will be available through a phased-in approach, with first doses available to the most at-risk populations. On December 1, 2020, the CDC Advisory Committee on Immunization Practices (ACIP) recommended that the first group to receive the vaccine, designated as “Phase 1a,” should be health care workers and residents in long term care facilities. On December 20, 2020, the ACIP recommended which groups should be prioritized next for COVID-19 vaccination, designated as Phase 1b and 1c. The ACIP recommended the below groups receive the vaccine in the following order:

  • Phase 1a: Health care workers (paid and unpaid persons serving in the healthcare setting who have potential for direct or indirect exposure to patients or infectious materials) and long-term care facility residents (adults who reside in facilities that provide a variety of services, including medical and personal care, to persons who are unable to live independently).
  • Phase 1b: “Frontline essential workers” and persons 75 years and older. “Frontline essential workers” are defined as workers who are in sectors essential to the functioning of society and are at substantially higher risk of exposure to COVID-19. “Frontline essential workers” include those who are first responders (firefighters, police officers) and those working in education (teachers, support staff, daycare workers), food and agriculture, manufacturing, corrections, the U.S. postal service, public transit, and grocery stores.
  • Phase 1c: People between the ages of 65 and 74, people between the ages of 16 and 64 who have high-risk underlying medical conditions, and “other essential workers.” The remaining essential workers include those working in transportation and logistics, food service, shelter and housing (construction), finance, IT and communication, energy, media, legal, public safety (engineers) and water and wastewater.

The ACIP’s recommendations are sent to the CDC Director for approval, and if approved, will become official CDC guidance that will be provided to state officials. As of December 20, 2020, Phase 1a had been approved by the CDC Director, whereas Phase 1b and 1c are awaiting approval. It is important to note that the ACIP’s recommendations on vaccine distribution do not need to be followed by the states, who have primary authority over vaccination distribution and are required to develop their own distribution plans. Nonetheless, it appears that the states have been looking to ACIP’s recommendations on how to distribute the vaccines. So far, states have been prioritizing health care workers with the initial doses of the vaccine they have received, in accordance with the ACIP’s recommendations. It is anticipated that the vaccine will be widely available for the general population in spring 2021.

Group Health Plans Must Cover the Vaccine Without Cost Sharing

The Coronavirus Aid, Relief, and Economic Security (CARES) Act requires all non-grandfathered group health plans (whether fully insured, self-insured or level funded) to cover certain preventative services (e.g. the vaccine) without cost sharing within 15 business days of a recommendation by the CDC ACIP or the United States Preventative Services Task Force (USPSTF).

On October 28, 2020, an interim final rule (which is effective until the end the COVID-19 public health emergency, which expires on January 20, 2021, absent an extension) was released that provided additional guidance on the requirement to provide preventative services without cost sharing:

  • Plans and issuers must cover items and services that are integral to the furnishing of the vaccine without cost sharing, regardless of whether the item or service is billed separately and regardless of whether the vaccine requires multiple doses.
    • Note: Plans may not impose cost sharing for an office visit if the primary purpose of the visit is for the administration of the vaccine and the office visit and the vaccine are billed together; plans may impose cost sharing for an office visit if the office visit and the administration of the vaccine are billed separately.
  • Plans and issuers must cover the vaccine by in-network and out-of-network providers. Plans are only required to cover the vaccine by out-of-network providers during the COVID-19 public emergency. Plans must reimburse out-of-network providers a reasonable rate based on prevailing market rates (e.g. Medicare rates) to ensure plan participants have access to a variety of out-of-network providers that will administer the vaccination.

Under normal circumstances, group health plans are only required to cover preventative services by in-network providers and even then, they have one year after a recommendation to cover those services. The CARES Act accelerates this timeline by requiring coverage within 15 days by both in and out-of-network providers.

Employer Vaccination Requirements

Generally, employers can require vaccination as a condition of employment, subject to restrictions under the federal Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act. In Equal Employment Opportunity Commission (EEOC) guidance, the EEOC states that an employee may be entitled to an exemption from a mandatory vaccination requirement if the employee has an ADA disability or a sincere religious belief, practice, or observance that prevents them from taking the vaccine. Under these situations, the employer must provide reasonable accommodation (e.g. masks, working from home) unless it would pose an undue hardship.

Generally, the EEOC recommends employers encourage employees to be vaccinated rather than making it a requirement. Employers who want to require their employees to be vaccinated should speak with employment counsel for further guidance. For more on this topic, see our blog “Can Employers Require Employees to Obtain the COVID-19 Vaccine?“

Employer Action Items

Employers sponsoring non-grandfathered group health plans are required to cover the COVID-19 vaccine. As such, employers must do the following if they have not already done so:

  • Required Plan Amendments: Employers may need to amend plan documents that describe the benefits that are covered under the plan (i.e. the insurance carrier’s evidence of coverage “EOC” or summary plan description “SPD”) to provide COVID-19 preventative services without cost sharing. For employers with fully insured plans, carriers may be working to automatically amend their EOCs to reflect this required change. Employers should re-distribute any amended EOCs or SPDs.
  • Employee Notice: Generally, employers have 210 days after the end of the plan year to distribute any “material modifications” to their plans. However, given the need for the vaccine, an employer should provide notice of this new benefit as soon as “reasonably practicable.”  

Additional Resources

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.