On January 10th, the Biden Administration issued guidance that will require group health plans to pay for at-home over the counter (OTC) COVID-19 tests approved by the U.S. Food and Drug Administration purchased on or after January 15, 2022.
Here’s what employers offering group health plans need to know about the latest COVID-19 testing coverage mandate:
Summary of the New Rule
The new rule requires plans either to arrange to provide OTC COVID-19 tests free of charge at the point of sale using a plan’s normal pharmacy or retail network or direct delivery system — or to reimburse the test costs after purchase. Where a plan requires reimbursement for an OTC COVID-19 test, reasonable proof of purchase can include the UPC code to verify that the item is FDA-approved, or a receipt that shows the purchase date and price.
- Plans must take reasonable steps to ensure that covered individuals can access OTC COVID-19 tests through an adequate number of in-person and online outlets. Plans also must provide covered individuals with the dates when the direct coverage program is available and a list of participating retailers or other locations.
- Preferred networks are to provide free OTC COVID-19 tests and to limit reimbursement for any out-of-network purchase to the lesser of the cost of the test or $12 per test. However, a plan cannot apply this limit if, for example, it cannot provide free OTC COVID-19 tests due to significantly longer delays for the tests than for other covered items under the plan. In this case, a plan cannot deny coverage or set limits on the reimbursement amount for any OTC COVID-19 test obtained by covered individuals, including tests purchased from non-network sellers. Finally, if a plan has not set up a network to provide free point-of-sale OTC COVID-19 tests, it must reimburse the full cost of a qualifying OTC COVID-19 test bought by a covered individual.
- Each covered individual may get up to eight OTC COVID-19 tests per month, so a family of four would be limited to 32 tests each month. The limits apply assuming a plan does not impose any cost-sharing requirement, prior authorization or other medical management condition on receiving an OTC COVID-19 test.
What should employers offering group health plans do?
- If you offer your employees group health plan coverage, you should coordinate with your insurance carriers and third-party administrators to determine how you will comply with the new mandate. This is particularly true if you plan to provide the required tests free through your pharmacy network or direct-to-consumer shipping program.
- You should also be prepared to communicate the details regarding how and where employees may access OTC COVID-19 tests under your plan.
Important Note: This Mandate Does Not Cover Workplace-Required Tests
The OTC COVID-19 testing mandate does not apply to tests required for employment purposes. Thus, where an employer requires employees to submit COVID-19 test results as a condition of employment, plans are not required to cover the costs under the new rules. Group health plans may take reasonable steps to ensure that an OTC COVID-19 test for which a covered individual purchased a test for their own use (or use by another covered member of the individual’s family).
For example, a plan or issuer could require an individual to attest in writing that they bought the OTC COVID-19 test for personal use, not for employment purposes, not for resale, and that the cost has not been (and will not be) reimbursed by another source. Note: Plans may, but do not have to, pay for OTC COVID-19 Tests bought before January 15.
