COVID Test Coverage: More Guidance for Health Plans

The joint departments have issued yet another set of five (5) FAQs addressing coverage of COVID tests under health plans. These build on the last FAQ release.

The full FAQ is fairly readable and available here. This article attempts to summarize the most critical guidance in as few words as possible.

Health Plans and Self-Funded Plans

Importantly, this guidance applies to health plans (insurers) and to self-funded plans. The guidance is not directly actionable for employers with fully insured plans, but it is important to be aware of the guidance for underlying health plans. Self-funded plans must address these issues directly.

Q1: Direct to Consumer COVID Tests

The safe harbor has been revised to allow significant flexibility to plans in how they provide access to over-the-counter (OTC) COVID-19 tests. Plans must ensure participants have adequate access with no upfront out-of-pocket expenditure. This generally means there is at least one direct-to-consumer shipping mechanism and at least one in-person mechanism.

Q2: Supply Shortages

Plans will not face enforcement action if they are temporarily unable to provide adequate access to OTC COVID-19 tests through their direct coverage program due to a supply shortage. In that case, plans may continue to limit reimbursement to $12 per test (or the full cost of the test, whichever is lower) for tests purchased outside of the direct coverage program.

Q3: Suspected Fraud

While medical management is prohibited, plans are permitted to address suspected fraud and abuse related to the reimbursement of OTC COVID-19 tests purchased by a participant from a private individual or via online auctions, resale marketplaces, or resellers. Specifically, plans may disallow reimbursement for tests that are purchased by a participant from a private individual via an in-person or online person-to-person sale, or from a seller that uses an online auction or resale marketplace. (Resale marketplaces refer to services like eBay, Facebook Marketplace, etc. In-person sales refers to purchasing from a friend or other contact that may have a supply of tests.)

Q4: Self-Collected/Lab Processed Tests

Plans are not required to provide coverage for tests that use a self-collected sample, but require processing by a laboratory or other health care provider to return results (such as home-collection PCR tests that can be purchased directly by consumers). However, when a test is ordered by an attending health care provider, such a test must be covered.

Q5: Reimbursement Through FSA/HRAs

While the cost of OTC tests purchased by an individual is a medical expense and thus generally reimbursable by a health FSA, HRA, or HSA, an individual cannot be reimbursed more than once for the same medical expense. Therefore, the cost (or the portion of the cost) of OTC COVID-19 tests paid or reimbursed by a plan cannot be reimbursed by a health FSA, HRA, or HSA. If an individual mistakenly receives reimbursement from a health FSA, HRA, or HSA, corrective measures should be initiated.