Background

On January 10, 2022, the Departments issued FAQ 51 requiring group health plans and insurers to cover over-the-counter COVID-19 tests without cost-sharing, prior authorization or other medical management requirements. The guidance noted plans may not limit test reimbursement to only participating providers.

However, it established 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.

We summarized FAQ 51 in our January 13, 2022 insight, “Guidance on Covering Over-the-Counter COVID-19 Tests.”

The new guidance

The new guidance, FAQ 52, clarifies that tests are only required to be covered if they:

• Can be obtained without a prescription
• Are processed without the involvement of a lab or healthcare provider

The new guidance provides significant additional details and flexibility about how to meet the safe harbor for covering over-the-counter COVID-19 tests.

How plans can meet the safe harbor

It clarifies that whether a direct coverage program meets the safe harbor will depend on the facts and circumstances, but such programs would have to include at least one direct-to-consumer shipping program that allows for online or telephone orders and one in-person mechanism. The in-person delivery mechanism may include the pharmacy network, other retailers and alternative distribution sites, such as a walk-up distribution center.

In some cases, if a plan covers employees in a localized area, it could be possible that distribution at a nearby location would satisfy both parts of the safe harbor, but plans would have to closely monitor this option to ensure the plan provides adequate access to tests.

Direct-to-consumer shipping programs can be through one provider or multiple providers. A retail pharmacy network that permits tests to be ordered online would meet that requirement. Plans must cover shipping costs in the same manner as other mail-order products. Plans must tell participants how to obtain tests, particularly if they are offering an in-person distribution process through a central location.

FAQ 52 states that a plan may still take advantage of the safe harbor if it is temporarily unable to provide tests due to a supply shortage. Additionally, the guidance permits a plan to limit the reimbursement of tests to those purchased from established retailers that would typically be expected to sell these tests.

Health spending or savings accounts shouldn’t be used to pay for the over-the-counter COVID-19 tests

The guidance states that an individual cannot be reimbursed twice for the same medical expense. It notes that plan sponsors may wish to advise individuals not to seek reimbursement for the cost of an over-the-counter COVID-19 test paid for by the plan from their health flexible spending arrangements (FSAs) or health reimbursement arrangements (HRAs). Similarly, the cost of an over-the-counter test paid for or reimbursed by a plan would not be a qualified medical expense eligible for reimbursement from a health savings account (HSAs).

Action items for plan sponsors

In response to the new guidance, plan sponsors that work with a pharmacy benefit manager and/or a medical administrative services provider should ask them whether they’re offering a direct option.

Additionally, plan sponsors should inform participants about the direct coverage option (if applicable) and advise them not to seek reimbursement from an FSA, HRA or HSA for over-the-counter COVID-19 tests.