January 2022 Employee Benefits Compliance Alert

Release Date: January 12, 2022

Federal Government Issues Guidance Requiring Insurance Companies and Group Health Plans to Cover Cost of Over-the-Counter At-Home COVID-19 Tests, Starting January 15

January 15

The federal government announced on January 10, 2022, that it is requiring insurance companies and group health plans to cover the cost of over-the-counter, at-home COVID-19 tests, so people with private health coverage can get them for free starting January 15. The new coverage requirement means that most participants with private health coverage can go online or to a pharmacy or store, buy a test, and either have it paid up front by their health plan or be reimbursed for the cost by submitting a claim to their plan. This requirement incentivizes insurers to cover these costs up front and ensures individuals do not need an order from their health care provider to access these tests for free.

Required Action: Need to Educate

Health plans and health insurers will need to educate their plan participants on the mechanics and process of how their health insurance will cover over-the-counter tests and other related information, such as where the test kits can be purchased and their shelf lives. The specific content is addressed in FAQ #5 in DOL guidance, under Additional Resources below. We expect your health insurance company or TPA will provide this guidance as well in short order, which should be shared with plan participants. In the interim, the federal government has published a generic FAQ letter for participants and employees, with a list of free community-based testing sites, at the following link: https://www.cms.gov/files/document/11022-faqs-otc-testing-guidance.pdf.

Eight Free OTC Tests per Individual per Month; Tests Must Have Been Approved by the FDA

Beginning January 15, 2022, individuals with private health insurance coverage or covered by a group health plan who purchase an over-the-counter COVID-19 diagnostic test authorized, cleared, or approved by the U.S. Food and Drug Administration (FDA) will be able to have those test costs covered by their plan or insurance. Insurance companies and health plans are required to cover 8 free over-the-counter at-home 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. There is no limit on the number of tests, including at-home tests, that are covered if ordered or administered by a health care provider following an individualized clinical assessment, including for those who may need them due to underlying medical conditions.

No Need for Doctor’s Approval or Clinical Assessment as a Prerequisite

Over-the-counter test purchases will be covered in the commercial market without the need for a health care provider’s order or individualized clinical assessment, and without any cost-sharing requirements such as deductibles, co-payments or coinsurance, prior authorization, or other medical management requirements.

Additional Resources:

DOL guidance can be found at the following link: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf.

Note: This alert constitutes compliance advice from the Fred C. Church Agency as your employee benefits broker and does not establish an attorney-client relationship with the recipient, who is free to consult with legal or tax counsel of their own choosing.