A common misconception has evolved that all COVID-19 testing is free for individuals. In actuality, only certain COVID-19 testing is free for an individual: (1) testing covered 100% by a health plan or issuer and (2) testing provided at no cost by a local government. Employers who will recommend or require “back-to-work” testing or general screening surveillance testing for asymptomatic employees should first confirm how the testing will be covered or subsidized in order to avoid surprise medical bills for their employees.
Under the Families First Coronavirus Response Act, individuals pay nothing for diagnostic COVID-19 testing and related services because these costs must be fully covered by group health plans and health insurance issuers. Federal law also prohibits balance billing for diagnostic COVID-19 testing.1 However, there are no such requirements for COVID-19 testing that is not considered “medically appropriate” for diagnosis or treatment. Unless provided for free by a local government, if an individual with no symptoms or known exposure receives a surveillance COVID-19 test, the individual will face some amount of out-of-pocket costs for the testing.2
Testing and related provider visit costs can range from several hundred to several thousand dollars. An individual’s health plan or issuer may cover a portion of the COVID-19 surveillance testing. However, typical cost-sharing will apply, such as copayments, coinsurance and deductibles. In addition, an out-of-network provider can balance bill the individual for any amount it charges that is not paid by the health plan or issuer.
In order to avoid surprise medical bills, an employer can make arrangements with a COVID-19 testing provider for the employer to directly pay the costs of surveillance testing for its asymptomatic employees. However, if an employer intends to cover testing for employees through its group health plan, then it should first check with its self-funded plan administrator or fully insured plan carrier to determine if the testing is covered and how claims will be administered. Employers may amend self-funded plans to cover asymptomatic testing. Consult with employee benefits counsel on any such plan amendment. Employers should also discuss with benefits counsel the privacy limitations that may apply to these screening records under the Health Insurance Portability and Accountability Act of 1996.
Under Section 3202(a) of the CARES Act, plans and issuers must reimburse any provider of COVID-19 diagnostic testing an amount that equals the negotiated rate, if any, or the cash price the provider lists on a public website. See also FAQ 9 of the FAQs about Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 43 (June 23, 2020), found at https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf.
Guidance issued jointly by the U.S. Departments of Labor (DOL), Health and Human Services (HHS), and Treasury states that COVID-19 testing must be covered without cost sharing only “when medically appropriate for the individual, as determined by the individual’s attending healthcare provider in accordance with accepted standards of current medical practice.” See FAQ 6 of the FAQs about Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 42 (April 11, 2020), found at https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf. The federal government does not precisely define standards for when testing is “medically appropriate” for diagnostic treatment but it refers to guidelines from the Centers for Disease Control and Prevention (CDC) that focus on displaying symptoms of, or a known exposure to, COVID-19.