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Health Plans Must Cover Over-the-Counter COVID-19 Tests Starting January 15

Health plans must cover over-the-counter (“OTC”) COVID-19 tests for all participants, beneficiaries, or enrollees—even without a health care provider’s order (a prior requirement). The U.S. Department of Health & Human Services, the Department of Labor, and the Treasury have jointly published FAQs outlining how health plans and insurance issuers must reimburse OTC COVID-19 tests under COVID-19-related legislation and the Affordable Care Act.

Importantly, the FAQs outline that coverage of OTC COVID-19 tests must be provided without imposing any cost-sharing requirements, subject to certain safe harbor conditions detailed below. Plans and issuers are also strongly encouraged to reimburse sellers directly without requiring individuals to provide upfront payment and subsequently seek reimbursement.

The FAQs make it clear that a plan or issuer may arrange for direct coverage of OTC COVID-19 tests through its pharmacy network and direct-to-consumer shipping program while limiting reimbursement from non-preferred pharmacies or retailers to either no less than the actual price or $12 per test (whichever is lower). This “safe harbor” would not apply, however, if a plan or issuer is unable to meet certain requirements, such as if there are delays that are significantly longer than the amount of time it takes to receive other items under the plan’s or issuer’s direct-to-consumer shipping program.

Furthermore, plans and issuers that provide coverage without cost sharing for OTC COVID-19 tests may limit coverage of OTC COVID-19 tests to no less than 8 tests per 30-day period or calendar month per participant, beneficiary, or enrollee. For packages that contain more than one test, plans and issuers may count each test separately. If a qualified individual has a health care provider’s order, the 8-test limit does not apply.

Also of note, plans and issuers are still not required to provide coverage of COVID-19 testing (including OTC testing) that is for employment purposes. Plans or issuers may also take reasonable steps to prevent fraud such as requiring an attestation (i.e., signature) that an OTC COVID-19 test was purchased by a qualified individual for personal use (not for employment purposes) and has not been reimbursed by another source and/or is not for resale.

This new rule is effective for OTC COVID-19 tests purchased on or after January 15, 2022, and will be in effect until the COVID-19 public health emergency period ends.

As always, McGrath North’s employee benefits attorneys are available to assist with any questions that may arise from this new guidance.