Health Plans Must Cover OTC COVID Tests

On Monday, January 10, regulators issued FAQ Part 51 giving health plans just four days advance notice to implement mandatory coverage of over-the-counter (OTC) COVID-19 home test kits effective Saturday, January 15, 2022, without member cost sharing, prior authorization requirements, or other medical management restrictions.  This applies to all insured and self-insured health plans, including grandfathered health plans.

Consumer FAQs are here describing the new rules for anyone enrolled in health coverage, but employers will want to supplement those FAQs with your own explanation of how this will work in conjunction with your health plan.

Here is a summary of the new requirements:

• 2020 guidance clarified that the FFCRA and CARES Act require health plans cover COVID-19 testing ordered by a health professional without cost sharing, prior authorization, or other medical management restrictions for the duration of the public health emergency.
  • Home tests were not available back then, so you had to go to a health professional to get tested.
  • Plans only had to cover these for diagnostic purposes, not employment screening purposes, but if the test was ordered by a health professional, the plan was not allowed to question the reason for the test and had to cover it as a diagnostic test.
• However, testing has expanded so there are now OTC tests that don’t require a health provider’s order.  FAQ Part 51 therefore updates guidance to state these must be similarly covered even if not ordered by a health provider.
  • Plans still only have to cover these for diagnosis purposes, not employment screening purposes.
• The plan must cover at least 8 tests per enrolled individual in the family per month.
• The plan may only request a copy of the UPC and/or receipt along with the employee’s attestation that it’s for personal use (not for employment screening), not reimbursed elsewhere, and will not be resold.
  • To be a true reimbursement model, it’s generally recommended to require a copy of the receipt.
  • Substantiation and reimbursement requirements cannot create “significant barriers” to getting access to OTC at-home test kits.
• If the plan wants to be able to control the costs of these reimbursements, they can voluntarily make arrangements with physical and online retailers and other sources to provide accessible tests which will bill the plan directly so the member doesn’t have to pay at the point of sale.  So long as there is adequate access to tests under such program, then the plan can limit tests purchased elsewhere to reimbursing no more than $12 per test ($24 per 2-pack).
  • Just note there might not be a feasible way to integrate an attestation requirement into such a point-of-service arrangement.

Employers/plan sponsors must ensure the plan is prepared to provide reimbursements to participants for OTC COVID-19 testing, or that the plan will be able to reimburse the sellers of test kits directly. This will require working with your insurance carrier or self-insured third-party administrator (TPA). The Departments’ FAQ Part 51 also includes new guidance for the coverage of preventive colonoscopies, and clarifications on coverage for FDA-approved contraceptive products.

Written by: KC Rippstein

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.