The U.S. Department of Labor (DOL) issued guidance to implement President Joe Biden's order that, starting Jan. 15, health plans must cover or reimburse costs for over-the-counter (OTC) at-home rapid COVID-19 tests without requiring health plan participants to pay any of the amount.
Employees and dependents covered by an employer-sponsored health plan can go online or to a pharmacy or store, buy a test approved by U.S. Food and Drug Administration, and either get it paid for upfront by their health plan or get reimbursed for the cost by submitting a claim to their plan.
Doctor's Authorization Not Required
On Jan. 10, the DOL's Employee Benefits Security Administration posted a new set of frequently asked questions and answers on the new coverage requirements. The FAQs were prepared jointly by the DOL, the Department of Human Services (HHS) and the Treasury.
The guidance states that OTC test kit purchases will be covered without the need for a health care provider's order or individualized clinical assessment, and without any cost-sharing requirements such as deductibles, co-payments or co-insurance, prior authorization, or other medical management requirements.
Amount of Reimbursement
When plans and insurers make tests available for upfront coverage through preferred pharmacies or retailers, they are still required to reimburse tests purchased by consumers outside of that network, at a rate of up to $12 per individual test (or the cost of the test, if less than $12) under a safe harbor in which the plan also offers direct coverage for OTC tests through a pharmacy network with direct shipment to consumers.
Plans, however, may elect to provide more generous reimbursement to plan enrollees up to the actual price of tests purchased from an out-of-network provider.
The coverage requirement applies to the cost of test kits intended for individualized diagnosis of COVID-19. The guidance does not require plans and insurers to cover the cost of routine testing for employment purposes.
Limits on Number of Tests
In addition, the DOL guidance clarifies that health plans and insurance issuers:
- May require a participant, beneficiary or enrollee who purchases an OTC COVID-19 test to submit a claim for reimbursement to the plan or issuer. However, "plans and issuers are strongly encouraged to provide direct coverage for OTC COVID-19 tests … by reimbursing sellers directly without requiring participants, beneficiaries, or enrollees to provide upfront payment and seek reimbursement."
- May provide coverage without cost-sharing for at-home tests purchased before Jan. 15 but are not required to do so.
- May set limits on the number or frequency of OTC COVID-19 tests covered without cost-sharing but must allow up to 8 tests per 30-day period (or per calendar month). 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 month.
- May not limit the number of tests reimbursed at no cost if the tests are ordered by a health care provider following a clinical assessment.
"By requiring private health plans to cover people's at-home tests, we are further expanding Americans' ability to get tests for free when they need them," said Health and Human Services Secretary Xavier Becerra.
CMS Guidance for Consumers
The federal Centers for Medicare and Medicaid Services (CMS) issued its own set of FAQs on Jan. 10, with information for consumers on getting at-home OTC tests with no cost.
Consumers are advised, for example, that they "can find out from their plan or insurer if it provides direct coverage of over-the-counter COVID-19 tests through such a program or whether they will need to submit a claim for reimbursement. If you are charged for your test after Jan. 15, keep your receipt and submit a claim to your insurance company for reimbursement."
"Testing is critically important to help reduce the spread of COVID-19, as well as to quickly diagnose COVID-19 so that it can be effectively treated," said CMS Administrator Chiquita Brooks-LaSure. The guidance issued by the DOL and CMS "further removes financial barriers and expands access to COVID-19 tests for millions of people."
Tests in Short Supply
A nationwide shortage of testing kits could impede the rollout of the reimbursement policy, Lindsey Dawson, an associate director at the Kaiser Family Foundation who has researched the availability of rapid tests, told The New York Times on Jan. 10.
"If reimbursement exists but there aren't tests to purchase," she said, "that doesn't help an individual consumer."
She added, "The policy could certainly drive demand, and could exacerbate the problem."