The Departments of Labor, Health and Human Services, and the Treasury jointly issued an FAQ recently to provide guidance for health plans and health insurers on how to reimburse for over-the-counter COVID-19 tests.
This FAQs was issued in response to the Biden administration’s requirement that health plans and insurers reimburse eligible individuals who purchase OTC COVID-19 tests during the health emergency. It relies on external authority under the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act.
Previously
Coverage of in-home COVID-19 tests required an order from a physician.
The physician determined the test was necessary for the individual based on current medical standards as well as if the test otherwise met the criteria under the FFCRA.
Now
The new FAQ effectively removes that requirement, necessitating instead that health plans and health insurers cover the cost of tests obtained without the involvement of a healthcare provider.
FAQ At a Glance
Coverage must be provided without imposing any cost-sharing requirements.
A health plan or health insurer is not required to pay the vendor directly and can instead require a participant, beneficiary or enrollee who’s purchased an OTC COVID-19 test to pay out-of-pocket and seek reimbursement.
Health plans and health insurers are not required to cover the cost of testing that is not primarily intended for individualized treatment of COVID-19, including testing that is for employment purposes only.
Health plans and health insurers may not limit payment of tests only to those provided through preferred pharmacies or other retailers.
They may limit the amount of covered OTC COVID-19 tests to 8 per participant, beneficiary or enrollee each calendar month (or 30-day period).
The FAQ provides for a safe harbor that may be followed by health plans and health insurers. Safe harbor rules include:
Direct payment of tests through both the pharmacy network and direct-to-consumer shipping program
Coverage for tests purchased at an out-of-network retailer can be limited to the actual price or $12 per test – whichever is lower
Ensure that key information needed to access testing is available to participants, beneficiaries and enrollees
If unable to meet its obligation under the safe harbor, the health plan or insurer is required to provide coverage for tests in a manner that is otherwise consistent with the guidance.
A health plan or health insurer may require reasonable documentation showing proof of purchase when a claim for reimbursement is submitted.
The health plan or health insurer may take steps within reason to ensure that a test was purchased for the participant’s own personal use or by another covered member of the participant’s family.
Due to the accelerated timeframe agencies have been given to apply this change, a challenge is likely to take place by mid-January.
That said, we encourage plan sponsors to consider their implementation strategy and the best ways they can mitigate costs.
Simpara’s belief is that plan sponsors will find it difficult to meet the safe harbor under the new guidance considering the ongoing shortage of available COVID-19 testing kits.
Requiring participants to pay out-of-pocket and seek reimbursement may be the best strategy to mitigate costs and avoid fraud.
Please reach out to us to discuss employee testing options and what this new guidance means for you!
