On February 4, 2022, the Departments of Labor, Health and Human Services and the Treasury (the “Departments”) released additional Frequently Asked Questions (FAQs) regarding Group Health Plan coverage of COVID-19 testing in free home sale. (OTC testing), with no participant cost sharing, prior authorization or medical coverage. The February FAQ provides clarification on the FAQ published by departments in January on this topic. [See our blog GROUP HEALTH PLANS MUST PAY FOR OVER-THE-COUNTER AT-HOME COVID-19 TESTS].
Recently released FAQs clarify and expand on the initial guidelines as follows:
- Flexibility in setting up direct-to-consumer shipping option and direct-coverage safe harbor. The January FAQ provided a “safe harbour” under which, if the group health plan arranges direct over-the-counter testing coverage at no upfront cost both through its network of in-person pharmacies and For a direct-to-consumer program, the plan may limit reimbursement for OTC tests purchased from pharmacies or non-preferred retailers to $12 per test or the cost of the test, whichever is less. The February FAQ offers greater flexibility in how group health plans can provide adequate access to over-the-counter testing through its direct coverage program. For example, a direct-to-consumer shipping program may include online or telephone ordering and may be provided through a pharmacy or other retailer, plan directly, or any other entity on behalf of the plane or feature. The February FAQ notes that a direct-to-consumer shipping program does not have to provide exclusive access through an entity, as long as it allows participants to place an order to have OTC tests shipped directly to them. For example, if the plan has chosen to provide direct in-person coverage of OTC testing through specified retailers, and those retailers maintain online platforms where individuals can also order testing to be delivered to them, departments will consider that the plan provided a direct-to-consumer shipping option.
- Coverage of shipping costs. The February FAQ clarifies that when OTC testing is provided through a direct-to-consumer shipping program, the plan must cover reasonable shipping costs associated with OTC testing in a manner consistent with other items or products provided by the map by correspondence. However, a plan that meets Safe Harbor requirements may limit total reimbursement to $12 per test (or total test cost, if lower) for OTC tests purchased outside of the Direct Coverage program. including shipping and sales tax.
- Supply shortage issues. The February FAQ clarifies that a group health plan will not be non-compliant with Safe Harbor if it has established a compliant direct coverage program but is temporarily unable to provide adequate access due to a shortage of OTC test supply. If this happens, the plan may limit reimbursement to $12 (or the total cost, whichever is lower) for OTC tests purchased outside of the Direct Coverage program.
- Fraud and abuse. Plans may establish a policy that limits OTC test coverage to tests purchased from established retailers who would typically be expected to sell OTC tests. Plans may prohibit reimbursement for the purchase of OTC tests from an individual, online auctions, or resale marketplaces.
- Home Collection PCR tests. The February FAQ clarifies that group health plans are not required to cover COVID-19 tests that use a self-collected sample but require processing by a laboratory or healthcare provider. However, these types of tests may be covered by other Ministry guidelines.
- Impact on FSAs, HRAs and HSAs. The February FAQ notes that the cost of OTC tests purchased by an individual is a medical expense that is reimbursable through a Flexible Expense Arrangement (FSA) and a Health Reimbursement Arrangement (HRA). However, since an individual cannot be reimbursed more than once for the same expense, OTC tests that are paid for or reimbursed by a group health plan cannot be reimbursed by an FSA or health HRA. . Similarly, expenses incurred for OTC testing paid for or reimbursed by a plan are not eligible medical expenses for the purposes of distributions from an individual’s Health Savings Account (HSA). If a person erroneously receives reimbursement from the FSA or HRA for OTC tests that were reimbursed by the group health scheme, the person will need to correct the erroneous reimbursement in accordance with the scheme’s correction procedures. Employers may advise individuals not to use an FSA or HRA health debit card to purchase OTC tests for which the individual intends to seek reimbursement from the group health plan.