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Employers face additional challenges and questions regarding a new rule issued by the Biden administration, which requires both private insurance and group health plans to pay for at-home, over-the-counter (OTC) COVID-19 test kits.
It’s important that the group health plan sponsors coordinate with their insurance carriers and third-party administrators to determine how they will comply with the new rule. This is particularly true if they plan to provide the required tests free through their pharmacy network or direct-to-consumer shipping program.
Employers should also be prepared to clearly communicate the difference between workplace testing mandates that are in place versus how participants may access OTC COVID-19 tests for personal use under the plan.
The OTC COVID-19 testing rule does not apply to tests required for employment purposes, such as “vaccination-or-test” policies. If an employer requires employees to submit and pay for COVID-19 test results as any condition of employment, plans are not required to cover the costs under the new rules.
The Department of Labor, the Department of Health and Human Services (HHS), and the Treasury Department teamed up to issue guidance on the new rule, which goes into effect January 15, 2022:
- Employers must arrange to provide OTC COVID-19 tests free of charge at the point of sale using a plan’s normal pharmacy, retail network or direct delivery system, or reimburse the test costs after purchase.
- Where a plan requires reimbursement for an OTC COVID-19 test, reasonable proof of purchase can include the UPC code to verify that the item is FDA-approved, or a receipt that shows the purchase date and price.
- Plans must take reasonable steps to ensure that covered individuals can access OTC COVID-19 tests through an adequate number of in-person and online outlets.
- Plans also must provide covered individuals with the dates when the direct coverage program is available and a list of participating retailers or other locations.
- Each covered individual may get up to eight OTC COVID-19 tests per month. This means a family of four would be eligible to receive reimbursement for up to 32 tests each month. The limits apply assuming a plan does not impose any cost-sharing requirement, prior authorization, or other medical management condition on receiving an OTC COVID-19 test.
- A plan or issuer should require an individual to state in writing that they bought the OTC COVID-19 test for personal use, not for employment purposes, not for resale, and that the cost has not been (and will not be) reimbursed by another source.
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