Group Health Plans Required to Cover the Cost of At-Home COVID-19 Tests

Employee Benefits & Executive Compensation

On December 2, 2021, President Biden announced that the Departments would issue guidance by January 15, 2022 to clarify that individuals who purchase over-the-counter COVID-19 diagnostic tests ("OTC COVID-19 tests") during the public health emergency will be able to seek reimbursement from their group health plan. The Department of Labor ("DOL") issued that guidance on January 10, 2022, pursuant to the Families First Coronavirus Response Act ("FFCRA") and the CARES Act, which require group health plans and health insurers to provide certain testing, diagnostic and related items for COVID-19 without cost sharing.

Coverage of OTC COVID-19 Tests

As of January 15, 2022, group health plans and insurers must cover OTC COVID-19 tests that meet the statutory criteria under FFCRA and CARES Act, including tests obtained without the involvement of a health care provider. Consistent with this, coverage must be provided without imposing any cost-sharing requirements, prior authorization or other medical management requirements. While a plan or issuer may require a participant to submit a claim for reimbursement, plans are strongly encouraged (and in some respects incentivized through the safe harbor discussed below) to provide direct coverage for OTC COVID-19 tests by reimbursing sellers directly without requiring upfront payment (i.e. a "direct sales" model or "direct coverage system").

It is important to note that although this guidance requires coverage without an order or individualized clinical assessment from a health care provider, it does not modify previous guidance in two important aspects:

  • Plans and insurers are still not required to provide coverage of testing (including an OTC COVID-19 test) that is for employment purposes.
    • If an Employer requires unvaccinated employees to test weekly, the group health plan does not need to provide coverage for that testing.
  • Plans still need to continue to provide coverage for COVID-19 tests that are administered with a provider’s guidance pursuant to prior guidance.

Limitations on Coverage

Group health plans can impose two "limitations" on the coverage of OTC COVID-19 tests.

Eight Tests Per Enrollee Per Month: Separate from the safe harbor, any group health plan can limit the number of OTC COVID-19 tests for each participant, beneficiary or enrollee to no more than eight tests per 30-day period or per calendar month. In applying this limit, the DOL states that plans may count each test separately, even if multiple tests are sold in one package. Plans cannot apply this limitation to a smaller number of tests over a shorter period (e.g., four tests per 15-day period), however, plans are permitted to set more generous limits.

Direct Coverage Safe Harbor: If a group health plan creates a direct coverage system whereby participants can purchase OTC COVID-19 tests without requiring upfront payment and subsequent reimbursement, the group health plan can impose some additional limitations on OTC COVID-19 tests bought outside of the direct coverage system. The system must include a retail purchase option (e.g. through a pharmacy network) in addition to a direct-to-consumer shipping program (e.g. Amazon or a pharmacy website). The plan must take reasonable steps to ensure that there is both adequate access to OTC COVID-19 tests and an adequate number of retail locations. If a group health plan implements a compliant direct coverage system pursuant to this guidance, then the plan can limit reimbursement for OTC COVID-19 tests purchased outside of the system to no less than the actual price or $12 per test (whichever price is lower). Plans may elect to provide a more generous reimbursement up to the actual cost.

Recognizing the current shortage of available OTC COVID-19 tests, the DOL cautions that if a plan is relying on a safe harbor but is unable to meet the requirements the plan could not take advantage of the reimbursement limit described above for the period of non-compliance. For example, if there is a three-month delay for the direct-to-consumer shipping program to ship OTC COVID-19 tests and most other items ship within one week, during the delay the group health plan would not be able to take advantage of the safe harbor’s relief.

Self-Attestation and Education

Given the current supply and demand for OTC COVID-19 tests, plans are permitted to take reasonable steps to ensure that covered individuals are seeking reimbursement or coverage of OTC COVID-19 tests for their own personal use provided they do not impose a significant barrier to coverage. The DOL states that by way of example, plans can require a brief attestation that the test was purchased by a participant for his/her personal use, not for employment purposes, and has not been and will not be reimbursed by another source. A plan may also require reasonable documentation of proof of purchase (e.g., a UPC code or a receipt documenting the date of purchase and price).

Plans and issuers are also able to provide education and information resources to support consumers seeking OTC COVID-19 testing, so long as such resources make it clear that the plan will comply with all requirements to cover OTC COVID-19 testing and that such resources are consistent with the OTC COVID-19 testing emergency use authorization. An example of such a resource would be guidance to support participant’s efforts to access and effectively use OTC COVID-19 tests and explain the difference between the different testing options.

In Conclusion - Act Quickly

Employers sponsoring group health plans should act quickly to ensure that they are in compliance with this latest guidance. In addition to implementing the changes administratively on a virtually immediate basis, participants must also be notified of the changes as soon as reasonably practicable. As previously noted this guidance takes effect on January 15, 2022 and is in effect for the duration of the public health emergency. If you have any questions about this guidance or want to discuss potential action items, please contact one of the experts listed below. Calfee will continue to monitor and be a resource for any additional guidance.

For additional information on this topic, please contact your regular Calfee attorney or the author(s) listed below:


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