Employer Health Plans Soon Must Pay for At-Home COVID-19 Tests

Cost-sharing will be prohibited, but upcoming guidance could limit coverage

Stephen Miller, CEBS By Stephen Miller, CEBS December 15, 2021
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Employer Health Plans Soon Must Pay for At-Home COVID-19 Tests

Update: Guidance Issued

On Jan. 10, 2022, the U.S. Department of Labor released 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. 

The guidance states that health plans must cover over-the-counter test purchases without requiring a health care provider's order or clinical assessment. Health plans 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). 

To learn more about the new guidelines, see the January 2022 SHRM Online article DOL Spells Out Requirements to Pay for COVID-19 Test Kits, Beginning Jan. 15.


President Joe Biden's nine-point action plan for COVID-19, released on Dec. 2, directs federal agencies to issue regulations requiring group health plans and insurers to 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.

"To expand access and affordability of at-home COVID-19 tests, the Departments of Health and Human Services, Labor and the Treasury will issue guidance by Jan. 15 to clarify that individuals who purchase OTC COVID-19 diagnostic tests will be able to seek reimbursement from their group health plan or health insurance issuer and have insurance cover the cost during the public health emergency," according to the White House announcement.

HR consultancy Mercer explained: "Under existing guidance (see FAQ Part 43, Q/A-4), at-home COVID tests must be covered without participant cost-sharing, but only when ordered by an attending health care provider who has determined the test is medically appropriate based on current accepted standards of medical practice."

Mercer noted that "group health plans and insurers currently may (but are not required to) provide coverage of at-home tests without participant cost-sharing even absent a health care provider's determination of medical necessity. While we await important details, it seems quite possible that forthcoming guidance will significantly expand the scope of required coverage of at-home COVID testing without participant cost-sharing, in short, by eliminating the need to involve a health care provider."

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Awaiting Guidance

The consultancy also reviewed questions that the forthcoming guidance should answer, such as:

  • May group health plans impose limits (such as number, frequency or dollar amount caps) on coverage and reimbursement of at-home tests without participant cost-sharing?
  • Will the at-home test be fully covered at the point of sale, or will participants need to pay upfront and then submit claims for reimbursement?
  • Will the at-home test need to be proctored by a health professional to be eligible for coverage without participant cost-sharing?

The New York Times reported that "reimbursement for COVID tests will not be retroactive, meaning consumers cannot submit receipts for what they have already purchased," and that it was "unclear if the government will limit reimbursements per person."

Value of At-Home Tests

Dr. Mark Pandori, director of Nevada State Public Health Laboratory, recently told the ABC News affiliate in Reno, Nev., that at-home testing "would provide individuals and groups with the intelligence they need to behave in a public-health-responsible manner." He noted that if coverage isn't provided at the point of sale, then "those with private health insurance will have to first buy the test, which can cost more than $20 for a pack of two, and then submit the receipt to get reimbursed," which could "pose a barrier for some people … particularly for people for whom that amount of money is significant."

He also noted that "different antigen tests have different qualities. These are tests that underperform when it comes to detecting very small amounts of virus. They will miss positive cases where people have very small amounts of virus in their nose or in their throat." While not foolproof, however, they should show a positive result if patients have a significant viral load and "are a danger to society at that point."

Ongoing Vaccine and Treatment Coverage

Julia Vander Weele, an attorney in the Kansas City, Mo., office of Spencer Fane, recently blogged a reminder that, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, nongrandfathered group health plans must cover COVID-19 vaccines without cost-sharing when a vaccine is authorized or approved.

While COVID-19 treatment is not mandated without cost-sharing, she noted, "some employers initially expanded the 100 percent cost-sharing provisions to treatment of the illness itself. However, given the broad availability of the vaccine, some of those same employers have now decided to terminate the more generous coverage provisions."

She advised, however, that the "exception to HIPAA's [the Health Insurance Portability and Accountability Act's] prohibition against discrimination based on a health factor applies only to premium discounts, rebates, and cost-sharing mechanisms," and that plans may not altogether "deny eligibility for benefits or coverage based on whether an individual obtains a COVID-19 vaccination."

Update: Government to Provide Free At-Home Test Kits

On Dec. 21, President Joe Biden said that the federal government is purchasing 500 million at-home rapid COVID-19 testing kits, to be sent free of charge to Americans who request them, and setting up new federal testing sites around the country to help states that need additional testing capacity.

The initial delivery of at-home testing kits will begin in January 2022, the White House said, although some consider that goal unlikely to be met, given a nationwide shortage of testing kits. The kits are to be distributed to the public by mail through a new website.

The announcement did not say if individuals would be able to request subsequent testing kits, which cannot be reused, or whether the free kits would be limited to people without private insurance.

The administration's action to allow Americans to buy and get reimbursed through private insurance for at-home tests, with guidance due by mid-January, still stands and is in addition to these new steps, a senior administration official said during a press briefing.



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