Private Health Insurance to Cover The COVID-19 Vaccine 

Under the Affordable Care Act, most Americans with private insurance should be able to get a COVID-19 vaccine for free, according to a report by the Commonwealth Fund. 

Additionally, the The California Department of Managed Health Care issued recent guidance and a FAQ about COVID-19 vaccine coverage.

Thanks to the ACA, most people with private insurance should have CDC–recommended vaccinations covered with no cost-sharing. Under the CARES Act, insurers must cover a COVID-19 vaccine 15 days after the CDC’s Advisory Committee on Immunization Practices (ACIP) recommends it. These requirements set a minimum standard; states may impose additional requirements on insurers.

In October, a federal regulation clarified several questions about the vaccine coverage mandate. Health plans and insurers must cover the vaccine and its administration even from an out-of-network provider. Health plans must reimburse these providers at a “reasonable” rate. 

Also, under the ACA, insurers must cover vaccines for “routine use.” They must cover any COVID-19 vaccine recommended by ACIP, regardless of whether it has been designated for routine use. The requirements in this rule will last throughout the federal public health emergency period.

For the uninsured, the federal government has purchased millions of COVID-19 vaccine doses. They will be free to the providers who administer them. These providers must agree not to balance bill recipients, and they can be reimbursed for serving the uninsured through the CARES Act Provider Relief Fund (PRF). However, once the initial federal purchases and PRF funds are exhausted, Congress may need to provide additional funding so that uninsured individuals can continue to get free vaccinations.

Possible Coverage Gaps with Health Insurance Plans

Grandfathered plans (as well as some plan types not available in California) are not required to cover the vaccinations. The federal requirement to cover vaccine administration by out-of-network providers only applies during the public health emergency, scheduled to expire on January 20, 2021. States may wish to extend this protection.

California DMHC FAQs

1.  If an enrollee changes health plans between getting the first and second doses of the vaccine, which plan pays for the second dose?

The enrollee’s new health plan would be responsible for the costs to administer the second dose of the vaccine.

2. How should plans determine which enrollees receive the vaccines when demand for the vaccine is greater than the supply?

California is adopting the three-phased approach to vaccination developed by the CDC. In Phase 1, when vaccine supply is expected to be limited, California will focus its efforts on vaccinating its critical populations, including healthcare personnel, people at increased risk for severe illness or death, and other essential workers. In Phases 2 to 3, as vaccine supply increases, vaccines will become available to a larger portion of the population.

Using CDC and California Department of Public Health guidance, local health departments will conduct provider recruitment and enrollment to identify and enroll providers in the State’s COVID-19 Provider Enrollment and Ordering Management System. Once enrolled, the providers will be eligible to receive vaccine allocations.

Enrolled providers must follow state and federal guidelines regarding prioritization and allocation of COVID-19 vaccinations. The DHMC does not anticipate that plans themselves, at least in the short term, will need to impose any utilization management criteria when reimbursing providers for the costs of administering the COVID-19 vaccines because the providers should be following the state and federal guidance about who is eligible to receive a vaccine. Once the COVID-19 vaccines become more widely available, the DMHC will work with stakeholders to develop further guidance regarding when health plans may impose utilization management criteria.

3. What if a provider requests a reimbursement amount for the administration of COVID-19 vaccines that the plan believes is unreasonably high? Does the plan simply have to pay billed charges?

The federal Final Interim Rule requires plans to reimburse non-contracted providers at a “reasonable” rate for the administration of the COVID-19 vaccines, as determined in comparison to prevailing market rates for such service. Guidance issued by CMS suggests that an example of “reasonable” reimbursement for non-contracted providers would be the Medicare reimbursement rate for the administration of COVID-19 vaccines. If a provider submits billed charges to a plan and those billed charges are not APL 20-039 – Health Plan Coverage of COVID-19 Vaccines December 11, 2020 Page 4 “reasonable” based on prevailing market rates for administration of the vaccines, the health plan would not be required to reimburse the provider at the billed charges.

4. If more than one vaccine is approved, can health plans choose to cover only one of the vaccines?

No. The CARES Act and the Interim Final Rules require plans to cover “any qualifying coronavirus preventative service,” which includes qualifying vaccines. Accordingly, plans may not choose to cover only a subset of qualifying vaccines.

5. If an employer, such as a health facility, administers the COVID-19 vaccine to their employees according to state and federal guidance, must the health plan cover administration of the vaccine for those enrollees?

Yes, if the employer is enrolled with the State’s COVID-19 Provider Enrollment and Ordering Management System. If the employer is an enrolled provider, the health plan covering the employer’s employees must cover the costs to administer COVID-19 vaccines to  employees even if the employer is not a provider in the plan’s network.

6. Where can plans find more information about the State’s guidelines for allocating COVID-19 vaccines?

The DMHC will continue to provide health plans with guidance as it becomes available. In the meantime, plans can visit the website for the California Department of Public Health at this link for information regarding the COVID-19 vaccination planning. Additionally, CMS has issued a tool kit regarding coverage of COVID-19 vaccines by health insurers and health plans.