Archived Insight | January 13, 2022

Guidance on Covering Over-the-Counter COVID-19 Tests

Group health plans and insurers must cover over-the-counter COVID-19 tests without cost-sharing, prior authorization or other medical management requirements, according to new guidance. The guidance from the Departments of Labor, Health and Human Service, and Treasury implements the ACA and CARES Act requirements to cover certain COVID-19 in vitro diagnostic COVID-19 tests without cost-sharing.

The guidance also contains new information concerning how non-grandfathered plans must cover colonoscopies and other preventive services.

Woman Doing A Nasal Swab Rapid Test

Requirements for covering over-the-counter COVID-19 tests

Under the guidance, FAQ 51:

  • Plans must reimburse participants for OTC COVID-19 tests, regardless of whether the individual has an order or individualized clinical assessment from a health care provider. Plans must provide the coverage without imposing any cost-sharing requirements, prior authorization or other medical management requirements. However, plans are not required to cover COVID-19 testing for employment purposes.
  • If a plan participant purchases the test out-of-pocket, the plan must allow the participant to submit a claim to the plan and obtain reimbursement for the cost of the test.
  • The Departments encourage plans to establish direct coverage programs that would allow participants to obtain tests without paying up-front. For example, the plan would arrange with its preferred provider organization to allow participants to purchase a test at a pharmacy at no cost, with the pharmacy billing the plan. Plans that have direct coverage programs must tell participants about the program.
  • Plans may not limit test reimbursement to only participating providers. However, the Departments establish a safe harbor that permits plans that have a direct coverage relationship through a participating pharmacy network and a direct-to-consumer shipping program to limit reimbursement for tests obtained from non-participating retailers to no less than the actual price or $12 per test, whichever is lower.
  • Plans may limit the number of over-the-counter COVID-19 tests covered without cost-sharing for each participant or dependent to eight tests for each 30-day period or calendar month. For example, a family of four would be able to receive reimbursement for up to 32 OTC tests per month.

The guidance on over-the-counter COVID-19 tests takes effect on January 15, 2022 and is prospective. Before the January 15, 2022 effective date of the guidance, plans may choose to cover over-the-counter COVID-19 tests purchased without a provider order or individual clinical assessment.

Plans must continue to provide coverage for COVID-19 tests that are administered with a provider’s involvement or prescription. Like the other COVID-19 testing coverage requirements in the CARES Act, the requirement does not appear to apply to retiree-only plans.

Addressing fraud and abuse

Plans may take reasonable steps to address fraud and abuse, including requiring participants to sign an attestation that the over-the-counter test was purchased for the individual’s own personal use, or by use of a covered family member.

Plans may also establish filing requirements for claim submission, including requiring appropriate receipts.

Participant communications

The Departments encourage plans to provide education and information resources to support consumers seeking OTC COVID-19 tests. Communication could include guidance to support access to approved tests and information about when to use them. The Departments also published consumer information in a post entitled, “How to Get Your At-Home Over-the-Counter COVID-19 Test for Free.”

Cost implications

These new requirements are likely to lead to short-term increases in plan costs.

Our Health Practice will soon share initial estimates.


Requirements for covering preventive services

For plan years beginning on or after May 31, 2022, the guidance requires non-grandfathered plans to cover without cost-sharing a follow-up colonoscopy conducted after a positive non-invasive stool-based screening test or direct visualization test (e.g., sigmoidoscopy, CT colonography). The Departments state that the colonoscopy conducted after such a positive test is an integral part of the preventive screening process.

Additionally, the guidance reminds non-grandfathered plans that all FDA-approved, cleared or granted contraceptive products that are medically appropriate must be covered without cost-sharing, even if they are not specifically identified in the current FDA Birth Control Guide.

Action items for plan sponsors

In response to this guidance, plan sponsors should consider taking following steps:

  • Reach out to the pharmacy benefit managers and medical administrative services provider, if applicable, to find out if they are offering a direct option.
  • Determine how their administrative service provider will reimburse claims for OTC tests, and communicate that process to plan participants.
  • Decide how to talk to participants about facilitating access to, effective use of, and prompt payment for OTC COVID-19 tests. Segal Benz can craft participant messages and create materials that address their questions and concerns.
  • Create an attestation form for verifying that a COVID-19 test is for personal use of the participant or family for diagnostic purposes.

Have questions about this guidance?

We can help. 

Contact Us

See more insights

Teacher In Classroom Points To Student Raising Hand

Webinar: How Do State Employee Health Benefits Compare?

See how your state employee health benefits compare to your peers. Our May 1 webinar features insights on health plans in all 50 states.
A Man In His 50S Is Holding Pill Bottles While Searching For Information Online

Guidance Clarifies RDS and Creditable Coverage Calculation

Sponsors of retiree health plans: Learn key aspects on how the CMS final guidance on changes to Medicare Part D prescription drug program impacts you.
Smiling Crossing Guard Helps Students Safely Cross Street

Segal Unveils 2024 State Employee Health Benefit Study and Interactive Plan Map

The study reveals health benefits available to full-time active employees enrolled in state benefit plans in all 50 states for 2023-2024.

This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.