As we previously reported, group health plans and insurers, including fully insured and self-insured group health plans, including grandfathered group health plans are required to cover over the counter COVID-19 tests (OTC tests) without cost sharing, prior authorization, or other medical management requirements as of January 15, 2022. This requirement will remain in effect throughout the duration of the “during the public health emergency.”
The anticipated guidance on this requirements has been released by the Departments of Labor (DOL), the Treasury, and Health and Human Services (HHS). In addition, the Center for Medicare and Medicaid Services also released guidance directed at consumers on how to obtain over the counter tests and how payment for the test is to be managed by plans and insurers.
OTC Coverage Requirements
Insurance companies and health plans are required to cover eight free OTC tests per covered individual per month. That means a family of four, all on the same plan, would be able to get up to 32 of these tests covered by their health plan per month.
As part of the requirement, the Administration is incentivizing insurers and group health plans by granting a “safe harbor” to those who to set up programs that allow people to get the OTC tests directly through preferred pharmacies, retailers, or other entities with no out-of-pocket costs. Insurers and plans would cover the costs upfront, eliminating the need for consumers to submit a claim for reimbursement. When plans and insurers make tests available for upfront coverage through preferred pharmacies or retailers, they are still required to reimburse tests purchased by consumers outside of that network, at a rate of up to $12 per individual test (or the cost of the test, if less than $12).
Safe Harbor for Direct Coverage
The safe harbor provides that the agencies will not take enforcement action related to coverage of OTC tests against any plan or issuer that provides coverage of OTC tests purchased by participants, beneficiaries, and enrollees during the public health emergency by arranging for direct coverage of OTC tests that meet the statutory criteria under the law through both its pharmacy network and a direct to-consumer shipping program, and allowing the plan to limit the reimbursement for OTC tests from non-preferred pharmacies or other retailers to no less than the actual price, or $12 per test, whichever is lower.
Next Steps for Employers
Employers will want to consider the incentives for setting up a program to allow plan participants to receive tests through preferred pharmacies, retailers, or other entities and determine which of these they would partner with to offer test kits. Self-insured employers should work with their claims administrator to discuss whether the claims administrator will establish a qualifying direct purchase arrangement.
Plans and issuers should ensure that participants, beneficiaries, and enrollees are aware of key information needed to access OTC testing, such as dates of availability of the direct coverage program and participating retailers or other locations. The agencies also encourage educating plan participants and beneficiaries on access to and use of OTC tests, including providing informational resources to support consumers seeking OTC testing.
Coverage requirements may also need to be included in open enrollment materials and communications, plan documents, summary plan descriptions (SPD), and summary of material modifications (SMM).
Employers are also strongly encouraged to review the interagency guidance to ensure their group health plan is in compliance.