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February 09, 2022

More Guidance on Coverage of Over-the-Counter COVID-19 Test Kits

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Key Takeaways

  • Plans may take appropriate measures to prevent or limit fraud and abuse by, for example, by limiting coverage to reputable sellers and requiring receipts and certain attestations.

Following up on their earlier guidance the Departments of the Treasury, Labor, and Health and Human Services have issued an additional set of frequently asked questions and answers on the requirement to cover over-the-counter COVID-19 test kits. The new FAQ primarily offers further explanation of a safe harbor approach described in the earlier guidance. This safe harbor generally applies when coverage is made available without any up-front cost to enrollees through at least one direct-to-consumer shipping mechanism and one in-person mechanism:

  • An example of a direct-to-consumer mechanism is one that allows enrollees to order tests online or by telephone for home delivery. An example of an in-person mechanism is an arrangement involving in-network pharmacies that receive payment directly from the applicable plan or insurer. It is permissible for the direct-to-consumer mechanism to be met through retail pharmacies that provide an online or telephone option for home delivery.
  • A plan must provide appropriate information to take advantage of the safe harbor. For example, it should inform enrollees which tests will be covered through direct shipping and in-network pharmacy purchases, if they are limited. There is no requirement to cover test kits made by every manufacturer under the safe harbor, although plans must still cover all test kits under the general requirement (a plan may limit reimbursement outside of the safe harbor to $12 per kit).
  • Under the safe harbor, a plan must cover the cost of direct-to-consumer shipping in a manner consistent with how it covers other mail order products.
  • Under the safe harbor, a plan must provide adequate access to retail pharmacies or other in-person providers through, for example, locations that are adequate in number and geographic placement.

The over-the-counter coverage rules apply to tests that may be self-administered and self-read. Other tests, such as those that must be read in a lab, must be covered in accordance with applicable terms of the FFCRA and CARES Act.

Although the new guidance has an effective date of February 4, 2022, a plan will not be deemed out of compliance because of a shortage of supply in test kits. It still may limit coverage of non-direct purchases to $12 per kit during this time.

Plans may take appropriate measures to prevent or limit fraud and abuse by, for example, by limiting coverage to reputable sellers and requiring receipts and certain attestations. Requirements of this nature should be communicated to plan participants and may not impose conditions that result in undue delays in the provision of the test kits.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

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