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OTC Covid Test Coverage: What are the exceptions?

Updated: Apr 21, 2023

On Jan 10, 2022, the DOL issued FAQ guidance requiring ALL health plans and issuers (fully-insured or self-insured) to reimburse or directly cover FDA-approved over-the-counter (OTC) COVID-19 diagnostic tests for the remainder of the public health emergency beginning on or after January 15th.

The FAQs say that because the FDA has authorized at-home OTC tests, and aims to remove the barriers to COVID-19 testing, the departments are updating their previous guidance to require coverage of tests under the FFCRA, with or without a medical provider’s exam or clinical assessment (see Q/A#1).

The coverage must be provided without any cost-sharing (deductibles, coinsurance, copays, etc.), prior authorization or other medical management requirements.

Health plans and carriers are required to cover 8 OTC at-home tests per covered individual per month. According to the CMS news release, this means that a family of four, all on the same plan, would be able to get up to 32 of these tests covered by their health plan per calendar month. There is no limit on the number of tests, including at-home OTC tests, that are covered if ordered or administered by a health care provider following an clinical assessment, including for those who may need them due to underlying medical conditions.

According to Q/A#2, a plan or issuer may not limit reimbursement or coverage for OTC tests to only preferred pharmacies or specific retailers. However, in order to incentivize direct up front coverage from the health plan, payment can be made directly to preferred pharmacies and retailers with no need for individuals to pay up front and seek reimbursement.

For example, if an individual has a plan that offers direct coverage through their preferred pharmacy but that individual instead purchases tests through an online retailer, the plan is still required to reimburse them up to $12 per individual test, but the individual would have to pay up front and seek reimbursement instead of having it covered at the pharmacy.

The guidance also confirms that plans or issuers (and employers) are NOT required to pay for COVID-19 testing that is for employment purposes (e.g., return to work policies or the "vaccine or test" ETS).

Q/A#4 suggests that a plan or carrier could, for example, have an individual sign an attestation that the OTC test was purchased for personal use, and not for employment purposes. However, it also points out that requiring multiple documents or onerous steps that unduly delay access to an OTC COVID-19 test is unreasonable.

Again, this requirement goes into effect starting Jan 15, 2022. As such, plans and carriers should take immediate steps to provide free coverage or reimbursement for all OTC at-home diagnostic tests authorized by the FDA for “participants, beneficiaries or enrollees.” This includes employees, dependents, COBRA QBs and covered retirees.

Employers should also review the CMS webpage designed for individuals related to this new requirement: How to get your At-Home Over-The-Counter COVID-19 Test for Free

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