The CARES Act Provides Clarity for Health Benefits Plans Amongst Relief for Individuals and Businesses

Insights | The CARES Act Provides Clarity for Health Benefits Plans Amongst Relief for Individuals and Businesses

The Coronavirus Aid Relief and Economic Security (CARES) Act was signed by the President on Friday afternoon, March 27th, 2020.  The new legislation brings welcome clarity to several unanswered questions left looming under the Families First Coronavirus Response Act (FFCRA) signed earlier this month.  In addition to answering questions related to telehealth and COVID-19 testing, the new rules also relax some restrictions for tax free reimbursement of certain over-the-counter expenses which is a welcome surprise for employers.


The FFCRA signed earlier this month made it clear that telehealth services could be covered at 100% without cost-sharing including deductibles and coinsurance for services related to the diagnosis of COVID-19 without disqualifying high deductible health plans for purposes of making contributions to a health savings account. However, what was unclear under current physical distancing guidelines was the application of telehealth for other services.  The CARES Act clarifies that a high deductible health plan may waive participant cost-sharing for all telehealth services through 2021 without jeopardizing an individual’s eligibility to make health savings account contributions.

COVID-19 Screening

Under the FFCRA, both fully-insured and self-funded group health plans are required to cover the initial testing and any health services related to the diagnosis of COVID-19 at 100% without application of cost-sharing provisions.  It was clear that this applied to all in-network services, however, the rules were less clear when it came to out of network services.  The CARES Act addresses out of network services and requires that they be reimbursed at the “cash price” or at a lower negotiated price as accepted by the provider.  The new rules also provide flexibility to allow for new types of testing that may be developed during the emergency period without limitation to testing approved by the Food and Drug Administration. In addition, the new rules require coverage of a COVID-19 vaccine as preventive when it becomes available.

Over-the-Counter Medications

The CARES Act also reverses provisions under the Affordable Care Act that prohibit the reimbursement of over-the-counter medications without a prescription including menstrual products.  Over-the-Counter medications may now be reimbursed without a prescription for plan years beginning after December 31, 2019.  This applies to Health Savings Accounts (HSAs), Healthcare Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs). 

Please contact your HORAN representative with any questions.