The DOL, HHS, and Treasury (collectively, the Departments) have provided new guidance in the form of frequently asked questions (the FAQs) to clarify that beginning January 15, 2022, individuals who purchase over-the-counter COVID-19 diagnostic tests during the public health emergency will be able to have the cost of such tests directly covered by, or seek reimbursement from, their group health plan or health insurance issuer, as further described below.

The Families First Coronavirus Response Act (FFCRA), which was enacted in March 2020 and later amended by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), requires all group health plans and health insurers to provide coverage for certain items and services related to testing and diagnosis of COVID-19 without imposing any cost-sharing requirements for the duration of the declared public health emergency. The term “group health plan” for purposes of this requirement includes all insured and self-insured group health plans, including group health plans sponsored by private employers (ERISA plans), non-federal governmental plans, and church plans.

In June 2020, the Departments issued guidance that required group health plans and health insurance issuers to cover COVID-19 tests intended for at-home testing, but only if the test was ordered by an attending health care provider who determined that the test was medically appropriate for the individual based on the then-current accepted standards of medical practice. However, testing for general workplace screening or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition was not required to be covered.

On January 10, 2022, the Departments issued the above FAQs, which provide that group health plans and health insurance issuers must now cover over-the-counter (OTC) COVID-19 tests purchased on or after January 15, 2022, including tests obtained without the involvement of a health care provider. This coverage must be provided without imposing any cost-sharing requirements, prior authorization, or other medical management requirements. The FAQs retain the rule that coverage is not required for testing that is for employment purposes.

A plan or issuer is permitted, although not required, to limit the number of OTC COVID-19 tests covered under the plan without cost sharing. If a limit is imposed, it must be set at no less than eight OTC COVID-19 tests per participant, beneficiary, or enrollee per 30-day period (or per calendar month). This limit does not apply to tests that are administered with a provider’s involvement or prescription.

A plan or insurer is not required to provide direct payment for these OTC COVID-19 tests, but plans and insurers are “strongly encouraged” to establish direct coverage options for covered individuals rather than requiring the individual to pay for the test and then seek reimbursement from the plan or insurer. If a plan or issuer provides direct coverage of OTC COVID-19 tests through preferred providers and direct-to-consumer shipping programs with no out-of-pocket costs, then the plan or issuer may limit reimbursements for tests obtained from non-preferred providers to the lesser of the actual price or $12 per test. The plan or issuer must take reasonable steps to ensure the covered persons have adequate access to OTC COVID-19 tests through its direct coverage program. If such direct coverage program is not established, then the full cost of the test must be covered.

The FAQs provide that plans and issuers are permitted to address suspected fraud and abuse when providing coverage of OTC COVID-19 tests. A plan or issuer may take reasonable steps to ensure that an OTC COVID-19 test for which an individual seeks coverage was purchased for the individual’s own personal use, or use by another covered member of the individual’s family, provided that such steps do not create significant barriers for covered persons to obtain these tests. For example, a plan or issuer could require an attestation, such as a signature on a brief attestation document attesting that the OTC COVID-19 test was purchased by the individual for personal use – not for employment purposes – and has not been (and will not be) reimbursed by another source or resold. A plan or issuer can also require reasonable documentation or proof of purchase with a claim for reimbursement for the cost of an OTC COVID-19 test.

In addition to developing and implementing appropriate procedures to provide the required coverage for these OTC COVID-19 tests, group health plan administrators and insurers should take steps to ensure that participants, beneficiaries, and enrollees are notified of the availability of any direct coverage program and participating retailers, along with the reimbursement process for tests purchased outside of those channels. If plans choose to provide education and information resources to support consumers seeking OTC COVID-19 testing, those resources must make clear that the plan or issuer provides coverage for, including reimbursement of, all OTC COVID-19 tests that meet the requirements above, and such information must be consistent with the test’s emergency use authorization. Although a direct coverage program is highly encouraged, due to the quick turnaround time between the release of the FAQs and the effective date of January 15, direct coverage programs may not be ready for use immediately. While the program is being established, the plan or issuer should communicate to participants the temporary procedures regarding eligibility and the process for reimbursement.