Health Insurance Plans Must Cover At-Home COVID-19 Tests

On January 10, 2022, the Departments of Labor, Health and Human Services, and the Treasury (‘Tri-Agencies) released guidance regarding the upcoming order for health plans and health insurance issuers to reimburse over the counter (OTC) COVID-19 tests. As first announced by President Biden on December 2, 2021, the order builds on the authority granted under FFCRA, and later the CARES Act, that had previously required plans to cover at-home COVID-19 tests on the condition that they were deemed medically necessary and ordered by an attending provider. As of January 15, 2022, the costs of these tests must be covered, even if they are obtained without the involvement of a healthcare provider.

Plans may establish a safe harbor through which they directly cover tests purchased through their pharmacy network or direct-to-consumer shipping program on the condition that participants have adequate access to the tests. For purposes of the safe harbor, direct coverage means that the individual will not need to seek reimbursement post-purchase; instead, the plan will issue payment to the preferred pharmacy or retailer directly. Adequate access refers to the dates and availability of tests at participating retailers and is intended to facilitate easy access to free OTC COVID-19 testing.

Plans that choose to comply with the safe harbor may limit the reimbursement of tests acquired from non-preferred pharmacies or retailers to the lesser of the actual price of $12 per test – although plans may choose to offer more generous coverage.

If a plan is unable to provide adequate access to OTC COVID-19 tests due to supply shortages or significant delays in receiving the tests via direct-to-consumer programs, then the plan can no longer rely on the safe harbor during the delays. This means that the plan would not impose cost-sharing measures on OTC COVID-19 tests obtained from non-preferred sellers during that time.

1. OTC COVID-19 tests must be for individualized use only – the plans do not have to cover tests for employment purposes.
2. Plans covered by the safe harbor must cover at least eight tests per 30-day period per individual.
3. Plans can require individuals to purchase a test and submit a claim for reimbursement instead of requiring direct coverage to the sellers.
4. Direct access can be provided by the plan’s pharmacy network or direct-to-consumer shipping so long as they provide adequate access. Plans may then limit the reimbursement of OTC COVID-19 tests from non-preferred pharmacies or retailers to be the lesser of the actual price of $12 per test – though the plan may provide greater coverage.
5. If plans limit reimbursement for non-preferred sellers, they must calculate the reimbursement based on the number of tests in a given package.
6. Plans and issuers may take appropriate steps to combat any suspected fraud, waste, and abuse, such as requiring reasonable documentation for proof of purchase or a signed brief attestation that the test was purchased by the participant for personal use and not for employment purposes or resale and that they will not be reimbursed by another source.

As the pandemic continues to present new challenges for individuals and businesses alike, the Aldrich Benefits Team is here to help you navigate change and stay up-to-date with the latest guidance. If you have questions about OTC COVID-19 test coverage, reach out to your Aldrich Advisor.