The Department of Labor (DOL), Secretary of Health and Human Services (HHS), and Department of the Treasury (Treasury) [collectively, “the Departments”] have issued additional guidance, in a new set of FAQs, that clarify certain aspects of the requirement that health plans cover the cost of over-the-counter COVID test with no cost sharing.


On January 10, 2022, the Departments released Frequently Asked Questions (FAQ) Part 51, in response to the Biden Administration’s directive to issue guidance requiring group health care plans and insurers to provide coverage of over-the-counter (OTC) in-home COVID-19 diagnostic tests.

Beginning January 15, 2022, group health care plans, including fully-insured and self-insured plans, and individual insurance policies, were required to cover the cost of OTC in-home COVID-19 testing without any cost sharing or requirements that participants obtain authorization for the tests.

On February 4th, the Departments released additional FAQs meant to clarify many of questions employers and plans have posed after the initial guidance was released. This alert updates our recent summary of the original guidance with information from the new FAQs.

Summary of OTC COVID-19 Tests Coverage

The guidance is applicable to self-insured and fully insured group health care plans, including grandfathered health plans (“plans”).

  • As of January 15, 2022, plans and issuers must cover the cost of OTC COVID-19 tests, including tests obtained without a health care provider’s order or authorization.
  • Coverage must be provided without cost-sharing (deductibles, co-payments, and coinsurance) or prior authorization requirements.
  • Plans must reimburse participants for the cost of testing per the plan’s claims procedures.
  • Plans are not required to reimburse sellers of the kits directly but may do so voluntarily. Plans must implement a direct reimbursement model (described below) to be able to limit the cost paid per test.
  • Plans may set a limit of no less than eight (8) tests per 30-day period (or calendar month) per participant for tests that do not involve a provider.

Note: the guidance specifically states that plans and issuers are not required to provide coverage of testing (including an OTC COVID-19 test) that is for employment purposes.

Limiting Reimbursements to $12 per Test and the Safe Harbor for Direct Plan Reimbursements to Sellers

Plans may not restrict reimbursements to OTC COVID-19 tests provided only by certain pharmacies or other retailers. However, if conditions of the safe harbor described below are met, plans may limit reimbursements for tests purchased from non-network pharmacies or other retailers to $12 per test, or the actual price, whichever is lower.

The new FAQs clarify that to satisfy this safe harbor, the plan must meet both of the following requirements:

  1. Implement a process of direct payment to the preferred (i.e. in-network) pharmacies or retailers so that the participant is not required to submit a claim for reimbursement; and
  2. Offer a “direct-to-consumer” shipping program that can be provided though an internet, mail or phone order arrangement and can be offered though a vendor or relationship separate from the health plan itself.

The new FAQs recognize that there may be supply shortages, but as long as the plan offers a direct-to-consumer program, the plan can still limit reimbursement for out-of-network tests to $12 even if the program experiences shortages and is temporarily unable to fulfill orders due to supply issues.

The Departments note that this safe harbor applies only with respect to the coverage of OTC COVID-19 tests that are administered without a provider’s involvement or prescription.

Plans and issuers must continue to provide coverage for COVID-19 tests that are administered with a provider’s involvement or prescription, as required by section 6001 of the Families First Coronavirus Response Act (FFCRA) and the Departments’ guidance, even when relying on this safe harbor.

Plans may take reasonable steps to reduce the potential for fraud and ensure that the covered test is purchased for the individual’s own use including an attestation by the participant that the test is for the participant’s (or beneficiary’s or enrollee’s) own use.

The new FAQs also allow plans to limit reimbursement to established pharmacies and retailers and refuse to reimburse tests purchased from individuals, temporary online marketplaces, etc.

HRA, HSA and Health FSA Reimbursements

The new FAQs confirms that OTC tests are eligible medical expenses that can be reimbursed using an HRA, HSA, or Health FSA, but point out that a participant cannot receive a reimbursement from any of these arrangements for tests that have been covered with no cost sharing by the health plan.


Health plans have been working since the original rules were released in early January to put the systems in place to reimburse tests as required, and many have already implemented direct pay programs so that out-of-network test reimbursements can be limited to $12. The full FAQs, including both Part 51 and 52, that contain the test reimbursement rules may be accessed announced.


IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.