Plans and insurers must cover over-the-counter COVID-19 tests under new tri-agency guidance

Eversheds Sutherland (US) LLP

Health plans and insurers must generally cover over-the-counter COVID-19 tests under Frequency Asked Questions (FAQs) issued on January 10 by the Departments of Labor, Treasury and Health and Human Services (tri-agencies). The guidance is effective for tests purchased on or after January 15, 2022, and provides, among other things, that (1) over-the-counter tests generally must be covered without cost to the participant, (2) only diagnostic tests are required to be covered without cost, not employer-mandated tests or other tests for surveillance purposes, and (3) a plan or insurer can apply limits on the number of covered tests per month, with a safe harbor limit of eight tests per eligible individual per month.


The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) together required coverage of testing for COVID-19, which the tri-agencies ) previously interpreted in a series of FAQs to mean only COVID-19 diagnostic testing ordered by a health provider.

When the tri-agencies issued their prior guidance, over-the-counter at-home tests were generally unavailable.  Since then, the availability and reliability of over-the-counter at-home tests has increased, as has the need for rapid result testing with the spread of new COVID-19 variants, such as Delta and Omicron. To address these new developments, President Biden announced at the end of 2021 that over-the-counter COVID-19 diagnostic tests would also be covered.  The tri-agencies issued FAQs interpreting this order without the usual notice and comment period based on their conclusion that it is in the public interest to do so.

New requirements for coverage of diagnostic COVID-19 tests

The FAQs provide guidance on various aspects of the new mandate to cover diagnostic over-the-counter COVID-19 tests.

  • Health plans and insurers must cover eligible over-the-counter COVID-19 diagnostic tests, without requiring a prescription or assessment from a health care provider. The particular tests that must be covered are outlined on the FDA website.
    • ESsentials: The guidance states that group health plans are only required to cover testing for diagnostic purposes, and that they are not required to reimburse employer-mandated tests or other tests that are not for individual diagnostic purposes.
    • ESsentials: It seems clear that the guidance is referring only to over-the-counter COVID-19 tests that can be self-administered at home, but the FAQs do not explicitly address the extent to which that includes at-home PCR tests in addition to rapid antigen tests.
  • Under the rules, over-the-counter COVID-19 tests must be provided without participant cost, prior authorization, or medical management requirements. 
  • The FAQs permit limits on the number of tests to be reimbursed per month, with a safe harbor of eight tests per 30 day period (or calendar month) for each participant, beneficiary, or enrollee. Where tests are sold in packets of two or more, each individual test counts as one. 
    • ESsentials: Health plans must continue to cover all tests prescribed by a medical provider, regardless of the number.
  • Direct reimbursement of the seller/test provider is not required, and instead the group health plan can require participants to submit a claim for reimbursement of the costs of the tests. 
    • ESsentials: The tri-agencies “strongly encourage” group health plans to provide direct coverage and reimburse sellers directly.
  • While group health plans cannot limit coverage to only tests purchased from “preferred” pharmacies or other retailers or through direct to consumer shipping programs, they can rely on a safe harbor to reach a somewhat similar result. The safe harbor provides that a plan or insurer can provide for direct, full coverage for tests acquired through a preferred pharmacy network or direct to consumer shipping program. The plan or insurer can then limit reimbursements for tests purchased from other retailers to $12 per test.
    • ESsentials: Ultimately, the approach chosen by the plan or insurer has to provide adequate access. If the preferred provider or direct to consumer shipping program cannot provide prompt access to tests, the plan or insurer must provide full reimbursement for tests purchased through other means.
    • ESsentials: Health plans must continue to cover all tests prescribed by a medical provider, regardless of how the test is purchased.
  • The FAQs permit processes to prevent fraud and abuse, such as:
    • requiring an attestation that the purchase was for individual use, and that the test was not resold or reimbursed by another source, or 
    • requiring reasonable documentation of proof of purchase, such as a receipt or UPC code, as long as the process does not unduly delay reimbursement. 
  • Health plans must start covering tests purchased on or after January 15, 2022. They may, but are not required to, cover tests purchased before January 15, 2022. The rules apply through end of the COVID-19 public health emergency period established by government agencies.
  • The guidance allows educational information on testing to be provided to employees, with some guidelines on the information that can be included in any notices.

ESsentials: The guidance does not specifically address first-dollar coverage by high deductible health plans with health savings account, but the original IRS guidance from Notice 2020-15, which says that a health plan that otherwise satisfies the requirements to be a high deductible health plan will not fail to be one because it “provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible” still remains in effect.

The new guidance and the January 15 deadline for compliance will require prompt action by plans and insurers to communicate the changes and update processes.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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