Health Care Reform Advisory: Guidance Released for Health Plan Coverage Over-The-Counter COVID-19 Tests

oswaldcompanies January 12, 2022

On January 10, 2022, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (“The Departments”) released Frequently Asked Questions (FAQ) Part 51, in response to the Biden Administration’s directive to issue guidance requiring group health care plans and insurers to provide coverage of over the counter (OTC) in-home COVID-19 diagnostic tests. Beginning January 15, 2022, group health care plans, including fully insured and self-insured plans, and individual insurance policies will be required to cover the cost of OTC in-home COVID-19 testing without any cost sharing or requirements that participants obtain authorization for the tests.

The FAQs build upon the requirements of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) for coverage of COVID-19 diagnostic testing, and the Affordable Care Act (ACA) preventive care requirements. In addition, the FAQs include guidance on coverage of preventive services.

Summary of OTC COVID-19 Tests Coverage (FAQs 1 through 8)

The guidance is applicable to self-insured and fully insured group health care plans, including grandfathered health plans (“plans”).

  • As of January 15, 2022, plans and issuers must cover the cost of OTC COVID-19 tests, including tests obtained without a health care provider’s order or authorization.
  • Coverage must be provided without cost-sharing (deductibles, co-payments, and coinsurance) or prior authorization requirements.
  • Plans must reimburse participants for the cost of testing per the plan’s claims procedures.
  • Plans are not required to reimburse sellers of the kits directly but may do so voluntarily.
    • The guidance “strongly encourages” plans to provide direct coverage for OTC COVID-19 tests by reimbursing sellers directly without requiring participants to seek reimbursement.

Note: the guidance specifically states that plans and issuers are not required to provide coverage of testing (including an OTC COVID-19 test) that is for employment purposes.

Safe Harbor for Direct Plan Reimbursements to Sellers

Plans may not restrict reimbursements to OTC tests provided only by certain pharmacies or other retailers. However, plans may limit reimbursements for tests purchased from non-network pharmacies or other retailers to or $12 per test, or the actual price, whichever is lower.

  • To satisfy this safe harbor, plans must ensure there is adequate in-network access to OTC COVID-19 tests, based on all the relevant facts and circumstances, and must implement the system changes necessary to process payment to the pharmacy or retailer directly.
  • Plans may set a limit of no less than eight (8) tests per 30-day period (or calendar month) per participant for tests that do not involve a provider.

The Departments note that this safe harbor applies only with respect to the coverage of OTC COVID-19 tests that are administered without a provider’s involvement or prescription. Plans and issuers must continue to provide coverage for COVID-19 tests that are administered with a provider’s involvement or prescription, as required by section 6001 of the FFCRA and the Departments’ guidance, even when relying on this safe harbor.

Plans may take reasonable steps to ensure that the covered test is purchased for the individual’s own use including an attestation by the participant that the test is for the participant’s (or beneficiary’s or enrollee’s) own use as long as these steps do not create “significant barriers” for these individuals to obtain the test. Plans may require reasonable documentation as proof of purchase with an individual’s claim for reimbursement.

Facilitating Access, Use and Payment for COVID-19 Tests

The guidance encourages plans (and thus, plan sponsors) to educate and support participants seeking OTC and provider involved COVID-19 testing including providing information:

  • Explaining the difference between OTC tests and tests ordered by a health care provider;
  • On reliability of tests, shelf life, and expiration dates;
  • On how to obtain tests directly from the plan or designated sellers; and
  • On how to submit a claim for reimbursement.

Oswald Observation

Oswald’s conversations with carriers and pharmacy benefit managers (PBMs) revealed that both types of entities were blindsided by the government’s announcement.  It is still not clear if the costs are to be processed as a medical claim or a prescription drug claim.

In addition to the above information, the Departments recommend plan sponsors communicate to their employees and also encourage their employees to use in-network pharmacies. This may help manage or hold down the plans’ costs.

Finally, Oswald has requested from carriers and PBMs whether they will be using the “direct coverage” methodology at the point-of-sale. Under this methodology, the carrier or PBM pays the cost of the over-the-counter COVID-19 tests directly to the seller rather than requiring the employee to purchase the test and submit requests for reimbursements. Oswald team members will contact our clients as carriers and PBMs release additional information.


The Departments’ FAQ Part 51 also includes new guidance for the coverage of preventive colonoscopies, and clarifications on coverage for FDA-approved contraceptive products. The full FAQ may be accessed here.

Please contact your Oswald client team representative for further information.

Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information. View our communications policy.