On December 2, 2021, as part of efforts to combat the COVID-19 pandemic, the White House announced its intention to require plans and insurers to cover all over the counter (OTC) COVID-19 diagnostic tests without cost-sharing and directed federal agencies to issue regulatory guidance by mid-January. As anticipated, on January 10, 2022, the Department of Labor (along with other federal agencies) issued regulatory guidance (FAQ) on the required coverage of OTC COVID-19 testing and clarifying how plan participants may seek reimbursement of OTC COVID-19 testing from their health plans during the remainder of the ongoing public health emergency. Below is a summary of that guidance.
Coverage for OTC COVID-19 Testing
Beginning January 15, 2022, all plans and insurers (including self-funded plans) are required to cover OTC COVID-19 testing for all plan participants, enrollees, or beneficiaries. Coverage of OTC testing is required regardless of whether a participant received individualized clinical assessment by a provider. (Note: as with earlier testing coverage mandates, plans are not required to provide coverage of OTC testing that is obtained solely for employment purposes.)
The Department provided two options that plans may utilize to implement coverage and provide reimbursement of OTC COVID-19 tests.
A. Direct Coverage
The ‘direct coverage’ option requires the plan to provide coverage by reimbursing sellers of OTC COVID-19 tests directly. Direct coverage means that a plan participant would not be required to seek reimbursement post-purchase. This option requires the plan or issuer to implement system changes necessary to process payment through the preferred pharmacy or retailer. Under this reimbursement model, a plan or issuer must also take reasonable steps to ensure participants have adequate access to OTC COVID-19 tests through enough retail locations (including in-person and online locations).
B. Claim Filing
The ‘claim filing’ option would require a participant to submit a claim for reimbursement to the plan or issuer. With this reimbursement option, a plan participant would file an out-of-network claim and reimbursement would be provided upon receipt.
Potential Limitation Options for Coverage
The Department provides that the plan or insurer may limit reimbursement for OTC COVID-19 tests under one of several safe harbors covered by the FAQ.
A. Limitation of Coverage Tests Purchased through a Preferred Pharmacy or other Retailers
Plan may steer participants to a preferred pharmacy or retailer provider (i.e., direct coverage or direct-consumer shipping) if it is seeking to utilize a reimbursement option that limits upfront costs of a participant. Plans utilizing such steerage may limit reimbursement for tests from non-preferred pharmacies or other retailers to no less than the actual price or $12 per test (whichever is less).
B. Limitations on Purchase Frequency
To deter “bad behavior” and ensure adequate accessibility to OTC testing, the guidance provides that plans can implement a purchase frequency for OTC COVID-19 testing per plan participant. A plan can limit purchase frequency per participant to no more than eight (8) individual tests per 30-day period (or per calendar month). Plans have the option to provide a more generous limit. However, they must not limit frequency to a smaller number of tests during a shorter period.
The guidance also provides additional discussion regarding plans’ right to address suspected fraud or abuse from participants seeking reimbursement. Plans may provide education and information to support consumers seeking OTC COVID-19 testing, so long as such resources clearly indicate the plan’s requirement to cover.
Changes to Preventive Services
It is worth noting that the FAQ includes some additional guidance on other topics, specifically related to (1) coverage of colonoscopies after a positive non-invasive screening test under the ACA preventive services mandate and (2) coverage of contraceptives under the preventive services mandate. The FAQ clarifies that coverage for all FDA-approved contraceptives must be covered without cost-sharing. As for the coverage of “follow-up” colonoscopies, specifically, such coverage must be implemented for plan years beginning on or after May 31, 2022. Changes to plan language for preventive services may be required along with an update to operational processes.
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