Plans Now Required to Cover Over-the-Counter COVID Tests

On January 10, 2022, the Biden administration suddenly announced that health plans and insurers must begin covering the cost of over-the-counter (“OTC”) COVID-19 tests by January 15, 2022. The three federal agencies mostly responsible for overseeing this process are the Departments of Health and Human Services, Treasury, and Labor (i.e., the “Joint Agencies”). Since the January 10th announcement, the Joint Agencies have released two FAQs aimed at addressing questions and concerns related to the rollout. The following will briefly summarize the important points from each FAQ.

  • Participants do not need a prescription, an order from a health care provider, or a clinical assessment for the tests to be covered.
  • Plans and insurers must cover up to eight (8) tests per person for each 30-day period. That means a family of four would be eligible for 32 tests per 30 days.
  • Plans and insurers can cover the tests in two separate ways; (1) Point-of-Sale Coverage or (2) Reimbursement Coverage. The Point-of-Sale method means the tests are covered when they are purchased, and the Participant does not have any out-of-pocket costs. The Reimbursement method requires the participant to purchase the test out-of-pocket before applying for reimbursement. If a Plan or insurer selects the Point-of-Sale method, they can also limit reimbursement to $12 per test.
  • The coverage only applies to OTC COVID-19 tests that are (1) FDA approved and (2) self-administered and self-read. That excludes not only experimental tests, but also tests that require a specimen to be sent to a laboratory for processing (also called PCR tests).
  • Plans and insurers can limit the reimbursement to purchases from “established retailers.” That means only reimbursing purchases from vendors like CVS, Walgreens, Rite Aid, Drug Mart, etc. Any purchases from an individual seller, whether that be in-person or through an online auction or resale marketplace (i.e., Amazon or eBay) can be excluded.
  • The tests are only available for personal use and do not include COVID testing for employment purposes or resale.
  • The coverage is effective on January 15, 2022 and will continue until the COVID-19 public health emergency is lifted.

Plans will first need to decide how they want to cover at-home COVID tests; at the Point-of-Sale or through a Reimbursement process. The main consideration here is that by covering the tests with no-out-pocket cost (i.e., the Point-of-Sale method), participants could be more likely to horde tests. However, this approach also allows plans to limit reimbursements to $12 per test. While most plans and insurers have already enacted a coverage program, the FAQs do not prohibit plans from switching to the other method. Additionally, the guidance concerning the PCR tests and individual sales were not published until after the rules became effective. Therefore, fiduciaries should continue to monitor the program they currently have in place, its utilization, and any additional guidance issued by the Joint Agencies.