The Departments of Labor, Health and Human Services, and Treasury (“the Departments”) recently issued Frequently Asked Questions (“FAQs”) regarding group health plans’ obligation to cover COVID-19 diagnostic tests under the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The FAQs provide new requirements to cover over-the-counter COVID-19 diagnostic tests obtained without a health care provider’s involvement.
As described in our May 27, 2020 Benefits Update, health plans must provide coverage for COVID-19 in-vitro diagnostic testing that meets certain criteria for coverage under the FFCRA and CARES Act, without imposing any cost-sharing, prior authorization or other medical management requirements. Prior guidance issued by the Departments provided that this coverage requirement includes COVID-19 tests intended for at-home use, when ordered by a health care provider. The FAQs expand the prior guidance to require that, effective January 15, 2022 and continuing until the end of the national public health emergency period, plans must cover over-the-counter COVID-19 diagnostic tests (“OTC tests”) purchased without an order from a health care provider.
The FAQs require group health plans to reimburse covered persons for their out-of-pocket costs for OTC tests, regardless of whether they are purchased from in-network or out-of-network providers or retailers. Plans are not required to cover OTC tests that are for employment-based purposes, public health surveillance, or any other purpose not intended for individual diagnosis and treatment of COVID-19. In addition, the FAQs permit plans to impose the following quantity limits, reimbursement limits, and claims submission requirements.
- Plans may limit the coverage for OTC tests that are administered without a medical provider’s involvement or prescription to eight (8) OTC tests per covered person per calendar month or other 30-day period. This means, for example, that if a plan applies this maximum quantity limit permitted by the FAQs, a family of four is entitled to up to 32 tests every calendar month or 30-day period. Multiple tests sold in one package may be counted separately. Plans cannot impose sub-limits that result in a smaller number of tests being provided over a shorter period (for example, 4 tests per 15-day period).
- Plans may limit the amount of reimbursement for OTC tests purchased out-of-network to a maximum of $12 per test, but only if they satisfy the following safe harbor requirements:
- Offer “direct coverage” of OTC tests by paying the network pharmacy or retailer for the test directly so the covered person receives the test for free (without having to pay the cost out of pocket and seek reimbursement post-purchase);
- Offer the direct coverage through both the plan’s pharmacy network and a direct-to-consumer shipping program;
- Take reasonable steps to ensure that the direct coverage program provides adequate access to OTC tests through an adequate number of retail locations (including both in-person and online locations); and
- Ensure that covered persons are aware of the key information needed to access OTC testing, such as dates of availability of the direct coverage program and participating retailers or other locations.
If a plan does not satisfy the above safe harbor requirements, it must reimburse covered persons for the full cost of the OTC test.
- Plans may take some action to prevent, detect, and address fraud and abuse. For example, plans may require reasonable documentation of purchase, such as the UPC code from the OTC test and a dated receipt showing the purchase price. Plans may also require a signed attestation that the covered person purchased the OTC test for personal use, not for employment purposes, will not be reimbursed by another source, and is not for resale.
The FAQs continue the Departments’ previous enforcement relief related to the requirement to provide an advance notice of material modifications that would impact the contents of the Summary of Benefits and Coverage (“SBC”). Under this continued relief, the Departments will not take enforcement action against any plan that does not provide advance notice. However, plans are still required to provide notice of any change as soon as reasonably practicable.
Please contact Slevin & Hart if you have questions about this guidance.
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