In a rush? Here are the key points.

There are three actions you may need to take now and three key points to consider regarding news about a possible vaccine. 

The vaccines

Pfizer and Moderna have recently announced promising results in the Phase 3 trial of their vaccines, and Pfizer will request Emergency Use Authorization from the Food and Drug Administration on November 20, 2020.

AstraZeneca also announced promising results of its late-stage vaccine trial on November 23, though the results have since caused confusion after the company disclosed that some trial participants had been mistakenly given a lower dosage than planned.

Johnson & Johnson, among many others, are expected to announce the results of their respective Phase 3 trials soon.

Several of the COVID-19 vaccines will require two-doses, require ultra-cold storage, and may be somewhat difficult to administer. The efficacy, storage, administration and number of doses all differ vaccine by vaccine.

There will be a phased-in distribution process initially targeting health care providers and vulnerable groups.

Coverage requirement

Once a vaccine has been approved by the Advisory Committee on Immunization Practices (ACIP), most group health plans will have to cover it (and related administration costs) within 15 days at no cost.

The ACA requires non-grandfathered plans to provide certain in-network preventive services without cost sharing. This includes services with an “A” or “B” recommendation from the U.S. Preventive Services Task Force (USPSTF) and immunizations recommended by the ACIP and adopted by the Director of the CDC. These must be covered by non-grandfathered plans by the first day of the first plan year that begins one year after the recommendation is posted.

The CARES Act modifies this rule to require that COVID-19-related preventive services recommended by the USPSTF or the ACIP be covered within 15 business days after any such recommendation is made (a much shorter deadline than applicable to other ACA preventive services). For the vaccine, the 15-day deadline will be triggered by approval from the ACIP/CDC or USPSTF (not by approval from the FDA).

Plans must cover both the vaccine and administration costs. Similar to paying for COVID-19 testing, if the purpose of an office visit is to obtain the vaccine, the office visit must be covered without cost-sharing as well.

A special rule issued by the federal agencies requires that during the COVID-19 Public Health Emergency (currently through January 21, 2021) recommended vaccines and administration must be covered with no cost-sharing whether provided in-network or out-of-network.

During the Emergency, when provided out-of-network, the plan must reimburse providers at a “reasonable” market rate, and the Medicare payment rate would qualify as reasonable. It is likely that the Public Health Emergency will be extended for additional 90-day periods. After the Public Health Emergency is over, vaccines appear to be able to be covered in-network only.

The Centers for Medicare & Medicaid Services (CMS) has announced that Medicare payment rates for COVID-19 vaccine administration costs will be $28.39 to administer a single-dose vaccine, and $16.94 and $28.39 for two-dose vaccine administration.

The rules discussed above apply to non-grandfathered plans. Grandfathered plans may adopt these policies or develop their own. Medicare will cover the cost of the vaccine under Part B with no coinsurance or deductible. Beneficiaries in Medicare Advantage plans will also receive the vaccine without coinsurance or deductible, CMS recently announced. 

Anticipated process of vaccine delivery

The CDC recently published an “Interim Playbook of Jurisdiction Operations,” which it plans to update regularly. The CDC estimates that any initial vaccine will be in limited supply and vaccine administration may be prioritized to include:

• Health care personnel (paid and unpaid persons serving in healthcare settings who have the potential for direct or indirect exposure to patients or infectious materials)
• Non-health care essential workers
• Adults with high-risk medical conditions who possess risk factors for severe COVID-19 illness
• People 65 years of age and older (including those living in long-term care facilities)

Most of the current trials involve a two-dose vaccine that requires ultra-cold storage. There will likely be multiple phases of the vaccine distribution, with subsequent phases reached when more doses of the vaccine become available, focusing first on vaccinating the vulnerable population, and then shifting to a routine vaccination strategy to reach the entire population and increasing uptake in communities with low coverage. Children have not been included in most trials, and are unlikely to have a vaccine available until later in 2021.

Anticipated effectiveness of vaccines

The drug maker Pfizer and BioNTech SE announced on November 9, 2020 that it had completed second phase testing on a vaccine that is 90 percent effective (but still awaiting large scale full phase 3 results).

Moderna announced on November 16, 2020 that its COVID-19 vaccine was 94.5 percent effective in a preliminary analysis of a large clinical trial. With high rates of effectiveness, the number of people who need to be vaccinated is likely to decline.

Then, on November 23, 2020, Astra Zeneca-Oxford announced that its vaccine candidate was up to 90 percent effective in an early analysis.

A half-dose of the vaccine followed by a full dose at least one month later was 90 percent effective. Another approach, giving patients two full doses one month apart, was 62 percent effective. The combined results showed an average efficacy rate of 70 percent.

The company said its vaccine could be stored for at least six months in a standard refrigerator, rather than under the intense chill required by other leading coronavirus vaccines, easing the distribution of a vaccine that is also cheaper and easier to produce than some of its competitors.

The other vaccines close to completing Phase 3 are from Johnson & Johnson and Novavax, each with a different level of effectiveness. The New York Times vaccine tracker has a detailed list of the vaccines in process.

Experts indicate that all of the vaccines will be necessary to inoculate millions of people, and urge individuals to continue to wear masks through 2021 in order to limit spread of the virus.

Vaccination and employment

There are significant legal issues involved in addressing whether employers can mandate that employees receive vaccinations. Among these laws are state and federal labor laws.

Two laws in particular would affect employment-mandated vaccines: The Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964. If an employer adopts a mandatory vaccine policy, it must provide an exemption process for both disability-based reasons (e.g., allergy to eggs or a seizure disorder) and for sincerely held religious beliefs, unless the accommodation would pose an undue hardship.

There is no guidance at this time on the COVID-19 vaccine, the Equal Employment Opportunity Commission (EEOC) has issued guidance on the flu vaccine, which discusses some of these legal concerns. The EEOC states that generally ADA-covered employers should consider simply encouraging employees to get the influenza vaccine rather than requiring them to take it.

Once a vaccine for COVID-19 becomes available, the EEOC may issue updated guidance. There may also be state and/or local laws that require vaccinations or allow employees to opt out of vaccinations.

Action items

Plan sponsors should review plan documents to determine whether they need to be amended to cover the vaccine as required by law. For additional information about the obligation to cover vaccines, see our compliance insight, “Guidance on Covering COVID-19 Preventive Services and Tests,” and our article, “Group Health Plans and COVID-19: What You Need to Know.”

Employers should consult with legal counsel prior to developing a vaccination policy.

Employers, unions and plan sponsors that are interested in becoming a vaccine administration site should reach out to their state and local governments to determine whether this approach is appropriate and meets the distribution plans for that state.