Group Health Plans Required to Cover COVID-19 Tests At Home, Sweet Home
On January 10, 2022, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) issued new guidance in the form of six FAQs regarding the requirement that health plans, including employer-sponsored group health plans, must cover the cost of certain at-home COVID-19 tests. This requirement applies for at-home tests purchased on or after January 15, 2022. This new guidance follows up on President Biden’s December announcement of his winter plan to combat COVID-19. See our previous client alert here. Notably, the Departments’ guidance states that group health plans must cover, through direct payment to the provider or by reimbursement to the participant, at least eight at-home tests per-participant-per-month.
Beginning March 18, 2020 and lasting until the expiration of the public health emergency declared by the Department of Health and Human Services (“HHS”), the Families First Coronavirus Response Act (“FFCRA”) generally requires all group health plans, including grandfathered group health plans, to cover certain items and services related to testing for COVID-19 without participant cost-sharing (i.e., deductibles, copayments or coinsurance). See our previous client alert here. In addition, group health plans are prohibited from imposing prior authorization requirements or other medical management requirements on the required COVID-19 testing items and services. Previously, this requirement was limited to situations in which an individual had an order or individualized clinical assessment from a health care provider for a COVID-19 test. Now, group health plans must cover the cost of certain at-home COVID-19 tests obtained without an order or the involvement of a health care provider.
As a general rule, the Departments’ guidance states that group health plans must cover, either through direct coverage or reimbursement to participants, the cost of at least eight at-home tests per-participant-per-month without a health care provider’s order. Plans may not limit coverage to only at-home tests that are purchased from preferred pharmacies or other retailers.
Specifically, the guidance mandates the coverage of at-home tests that satisfy the following requirements: (1) tests that have been approved, cleared, or authorized under federal law; (2) tests for which the developer has requested, or intends to request, an emergency use authorization from the FDA (unless the request is denied or is not timely submitted); (3) tests developed in and authorized by a state that has notified HHS of the state’s intention to review the test; and (4) other tests that HHS determines appropriate in guidance.
These FAQs clarify—consistent with the DOL’s previous guidance for tests that required an order from a health care provider or individualized clinical assessment—that the requirement to cover at-home tests for “employment purposes” is not required. As a result, if the OSHA vaccination mandate survives the Supreme Court challenge, group health plans are not required to cover tests that are necessary to comply with the OSHA mandate for unvaccinated employees.
Amount of Reimbursement
A group health plan may limit its reimbursement of at-home tests to the lesser of $12 or the actual cost of the test, if the following requirements are met:
- The group health plan provides “direct coverage” of at-home tests without prior authorization, or other medical management requirements. “Direct coverage” means the group health plan reimburses the preferred pharmacy or retailer that sells the at-home test directly without participant cost-sharing (i.e., participants are not required to seek reimbursement from the group health plan after purchasing an at-home test).
- Participants must have access to at-home tests through an adequate number of retail locations (including in-person and online).
- Participants should also be provided with the “key information” about how to obtain at-home tests through the direct coverage arrangement.
If a group health plan satisfies these requirements, it may also impose cost-sharing on at-home tests that are purchased from non-preferred pharmacies and retailers.
Number of Tests
In addition, the Departments’ guidance states that group health plans may limit the number of at-home tests to eight per-participant-per-month, provided that the group health plan does not impose cost-sharing, prior authorization, or other medical management requirements on such tests. For example, a group health plan may limit the number of at-home tests for a family of four participants to 32 tests per month.
Actions to Prevent Fraud and Abuse
The Departments’ guidance also provides that group health plans may act to prevent, detect, and address suspected fraud and abuse. In other words, group health plans may take reasonable steps to ensure that an at-home test was purchased for personal use. For example, group health plans may require an attestation from participants that the participant purchased the at-home test for personal use (not for employment purposes), that the participant has not been (and will not be) reimbursed by another source, and that the participant has not purchased the at-home test for resale.
Additionally, group health plans may require reasonable documentation of proof of purchase with a claim for reimbursement from a participant (i.e., when an at-home test is not purchased through a “direct coverage” arrangement). For example, group health plans may require submission of a receipt from a provider documenting the date of purchase and price.
Guidance on Summary of Benefits and Coverage
The Departments continued their previous enforcement relief related to the requirement to provide an advance notice of Summary of Benefits and Coverage (“SBC”) in certain circumstances. Under this continued relief, the Departments will not take enforcement action against any plan that does not provide at least 60 days’ advance notice of a material modification regarding the addition of coverage for at-home tests. However, plans are still required to provide notice of any change as soon as reasonably practicable. Plan sponsors should work with their insurers (of fully insured plans) or third-party administrators (of self-funded plans) to review their current SBCs to determine if a new SBC is necessary due to the requirement to cover at-home tests.
Group health plans will need to act quickly to comply with the new guidance, which takes effect for at-home tests purchased on or after January 15, 2022. Plan sponsors of group health plans should consult with their insurers (of fully insured plans) or third-party administrators (of self-funded plans) as soon as possible to discuss compliance with this guidance.
If you have any questions, please contact the authors or another one of the Miller Johnson employee benefits attorneys.