Employer Health Plans Required to Pay for At-Home COVID Tests

By Margaret Faso posted 7 days ago


As HR Policy previously reported, the Biden administration has released updated rules requiring employer plans to cover the cost of up to eight over-the-counter at-home COVID tests per covered individual per month, beginning January 15, 2022. The Association joined other employer groups in requesting a 60-day delay in the application of the requirements as the administration only provided four days' notice before the requirements go into effect.

Background: The Families First Coronavirus Response Act (FFCRA), amended by the CARES Act, requires group health plans to provide coverage for certain items and services related to the detection and diagnosis of COVID-19 without cost-sharing requirements and authorizes the Departments of Labor, Health and Human Services, and Treasury to implement these requirements. Previous guidance required employer plans to provide first-dollar coverage for COVID tests when an individual seeks and receives a diagnostic test from a licensed or authorized health care provider, or when a provider refers an individual for a diagnostic test, including asymptomatic individuals with no exposure to COVID.

New rules do not require an order from a health care provider to access free tests. The administration incentivizes group health plans to set up preferred network programs and pay sellers directly so that beneficiaries do not need to pay at the time of purchase and later seek reimbursement. The guidance requires employers to:

  • Cover FDA authorized or approved COVID-19 at-home over-the-counter tests, even those that do not require an order or clinical assessment from a health care provider;

  • Cover no less than eight individual tests per covered individual, per month and limits based on shorter time periods are not allowed (e.g., only covering three tests per 15-day period);

  • Reimburse at a rate of up to $12 per individual test (or the cost of the test if less) for tests purchased at locations outside of their network, if the employer sets up programs with preferred pharmacies, retailors, or other entities.

Employers can obtain bulk at-home tests and distribute them to their workforce. In this case, the distributed tests would likely count towards the required eight tests but we have requested confirmation on whether this can only be provided to the primary holder or also includes covered family members.

Outlook: HR Policy will continue engaging with the Departments on the implementation challenges employers will face, addressing issues with the tight implementation period, challenges setting up preferred network safe harbors, and the impact this will have on already existing over-the-counter test shortages.

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