Over-The-Counter COVID-19 Testing Coverage Requirements - Updated

On January 10th, various federal agencies issued guidance in the form of Frequently Asked Questions (FAQs) around the Biden administration’s mandate that group health plans must cover over-the-counter (OTC) COVID-19 tests. On February 4th, additional FAQ guidance was issued providing some flexibility and clarification for plans and insurers. The mandate took effect on January 15th and stipulates that there be no member cost share or copays when purchasing an OTC test.

In a nutshell, health plans must cover eight individual at-home OTC COVID-19 tests per person enrolled in the plan per month. That means a family of four can get 32 tests per month for free. Importantly, this mandate does not include surveillance tests one may need for work.

Below are some key headlines related to the requirement:

  • Effective Date: The requirement is effective on January 15, 2022, and continues for the duration of the public health emergency. Coverage may, but is not required to, be provided for OTC tests purchased before January 15, 2022.

  • Per Test Dollar Limit/Reimbursement: Plans must provide coverage without out-of-pocket expenses to the participant. The plan can provide the coverage by reimbursing sellers (i.e., CVS, Walgreens, etc.) for tests directly (“direct coverage”) or by requiring participants who purchase an OTC test to submit a claim for reimbursement to the plan. The agencies strongly encourage, but do not require, direct coverage. The requirement stipulates that plan members not be limited to having to use a network pharmacy. Also, under a safe harbor, the agencies provide that plans may limit reimbursement of tests purchased outside the direct coverage (i.e., when one files a claim) to $12 per test or the cost of the test, if lower. CMS has issued Q&As for employees entitled How to Get Your At-Home Over-the-Counter COVID-19 Test for Free.” These Q&As describe the test cost limits applicable when a plan sets up a network of convenient options such as pharmacies or retailers, including online retailers, in which individuals on their plans can get their tests’ cost covered up front (at the point of sale), versus where a plan does not set up a process through which individuals can obtain tests with no upfront costs.

  • Satisfying the Safe Harbor: The February FAQs provided clarification on the $12 safe harbor, and generally require that OTC tests be made available through at least one direct-to-consumer shipping mechanism and at least one in-person mechanism. The FAQs also clarify that when providing tests through a direct-to-consumer shipping program, plans and issuers must cover reasonable shipping costs related to covered tests in a manner consistent with other items or products provided by the plan or issuer via mail order.

  • Quantity Limit: Plans may limit the number of tests reimbursed to no less than eight OTC tests per covered individual per 30-day period (or per calendar month). This applies to tests purchased without the involvement of a health care provider.

  • Scope of Requirement: Until now, it has been generally understood that group health plans were required to cover COVID-19 “diagnostic” tests when provided by a medical provider. Under the new requirement, there will be no medical provider involved. However, the new requirement continues to only apply to “diagnostic” OTC tests, primarily intended for individualized diagnosis or treatment of COVID-19. Testing that is for employment (surveillance) purposes is not considered diagnostic and so tests for employment purposes do not fall under this new requirement. The requirements allow plans to require attestation that the test was purchased for the covered individual, is not for employment purposes, has not and will not be reimbursed by another source and is not for resale. Plans may also require reasonable documentation of proof of purchase.

  • Self-Administered/Provider-Read Tests: Plans are not required to provide coverage for OTC tests that use a self-collected sample, but require processing at a lab or with a health care provider. However, plans and issuers are required to provide coverage for OTC tests when ordered by a health care provider.

  • Account Based Plan Reimbursement: An individual cannot be reimbursed more than once for the same qualified medical expense, so an OTC test paid for or reimbursed by a health plan or insurer cannot be submitted for reimbursement to a health flexible spending account (FSA), a health reimbursement arrangement (HRA), or a health savings account (HSA).

Conner Strong & Buckelew continues to assist clients with this mandate and is working with the various health plans and pharmacy benefit managers (“PBMs”) to understand their systems and processes for adhering to this requirement. If you have any immediate questions related to this requirement, please contact your Conner Strong & Buckelew representative toll-free at 1-877-861-3220. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

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The various federal agencies regularly release Affordable Care Act (ACA) and other indexed dollar limits for health and group benefit plans. We have updated the chart below (last published August 2022