April 20, 2020

Guidance for Flume Health plans responding to COVID-19

Kevin Schlotman


Flume Health Regulatory Update

Flume is committed to supporting our clients and friends through these uncertain times.  We have reached out to our clients with guidance on how to help them optimize their plans to meet the needs of their employees regarding COVID-19 testing and treatment. 

In light of that, we’re making public that same  communication in hopes that it will give other self-funded plan advisors  an example framework for deciding if and how to amend self-funded plans to specifically address COVID-19. We also want to shed light on some misleading information we’ve seen in various publications.

This blog post is for any plan sponsor or advisor looking for examples of how leaders in the space are responding to the COVID-19 situation. 

Federal Regulation Around COVID-19, And What It Means For Self-Funded Plan Sponsors

A few states, such as New York and Washington, have issued regulatory statements or orders requiring insurance companies to cover COVID-19 tests at no charge to patients. This means simply that the applicable patient responsibility, such as copays and deductibles, would be waived for anyone covered under those participating carrier plans. Some insurance carriers, such as Cigna and Aetna, are also choosing to waive co-pays for COVID-19 tests in some circumstances for their fully-insured members.

All Flume Health Plans and many self-funded plans, however, are governed by Federal Law (ERISA).  Such plans are not required to conform to the same state insurance regulations.  Federal Agency guidance is being released daily, but the releases to date apply only to fully insured Plans. Self-Funded health Plan Sponsors may CHOOSE to eliminate patient costs for COVID-19 testing but are not compelled (at least currently) by regulation to do so. 

Important Factors When Considering How To Offer COVID-19 Coverage to Employees

If plan sponsors are interested in updating their plan to cover a patient’s cost for COVID-19 testing, we have encouraged our clients to consider the following issues:

  • The change may require a Plan Amendment and a nominal charge to adjust the system setup.
  • The COVID-19 test will become part of the Preventive Services benefit.
  • The Plan must decide how they wish to reimburse Emergency Room charges. This would mean various options including either (1) COVID-19 diagnostic tests would be paid at 100% but ER charges are paid like any other condition, or (2) the entire episode of care would be paid at 100%.
  • Several statements indicate that “Testing AND Treatment” will be reimbursed at 100%.  We find this to be ambiguous and have requested that our national association request clarification from the Department of Health and Human Services.  If “treatment” is reimbursed at 100%, that would mean the plan would waive the deductible and all other out of pocket expenses for a hospital admission, and/or copayments for follow-up office visits.  
  • There is not yet a known cost for the COVID-19 diagnostic test. To date, the tests have been administered at hospitals in the ER and sent to CDC or state laboratories at no charge. However, as private sector labs begin handling testing, this is likely to change.
  • Tests are beginning to become more readily available and will be able to be administered in Urgent Care, retail clinics, or physician’s offices (just like the flu test).  This fact may inform a plan sponsors decision regarding payment of ER or other out of pocket costs.

Next Steps For Flume Plans

Flume Health is ready to support clients, members, and their families throughout the course of the COVID-19 episode. We will keep up to date on regulations and releases so we and our clients can make as informed a decision as possible. For anyone considering an amendment to their self-funded Plan related to COVID-19, we have recommended scheduling a call between the advisor, all the key stakeholders of the plan sponsor’s organization, and ourselves as plan administrator to discuss the options.  


Wishing you safety and health,

Kevin Schlotman, COO




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