On January 10, 2022, guidance was released requiring group health plans and insurers to cover over-the-counter (OTC) COVID-19 diagnostic tests for members without cost sharing or prior authorization. This coverage began on January 15, 2022, creating challenges for all parties in implementing the processes necessary for compliance. The directive allows members with private insurance to purchase COVID-19 tests at the pharmacy, a retailer, or online and have them paid for by submitting a claim to the insurer or plan for reimbursement or paid for directly (direct coverage). Although not required, the guidance “strongly encourages” insurers to provide direct access avoiding the need for members to seek reimbursement. The following article provides additional clarification regarding the Biden Administration’s directive.
PSG offers the following comments and considerations to its plan sponsor clients.
Cost Containment Considerations
The basic coverage requirements offer little cost containment protection to plans against potential abuse of the benefit. However, two safe harbor provisions allow plans to implement limitations if certain conditions are met.
Reimbursement and Quantity Safe Harbor
Implementing the safe harbor provisions under the specified conditions can facilitate member access and provide plan sponsors with some control over unlimited testing. The reimbursement safe harbor only affords protection if adequate access is determined, but the FAQ does not define “adequate access.” Due to the scarcity of OTC COVID-19 tests, plans must be diligent in assessing access and availability within preferred networks so that quantity limits on tests can be applied.
Network Setup Considerations
Evaluating options and setting up a managed benefit can be advantageous to plan sponsors as it can reduce potential abuse of the benefit, as noted in the safe harbor above. PBMs are understandably quickly reacting to the guidance, and information is constantly evolving. PBM’s communicated initial approaches to operationalizing this directive, but it is expected that insurers, health plans, and PBMs will continue to build out strategies. Clients should work to ensure they are aware of the current and future state of the programs.
Member Experience Considerations
The COVID-19 pandemic has been extremely challenging for employees and their families. Convenient access to testing can reduce some of those challenges and the spread of infection. Consequently, we encourage clients to consider the following as they implement testing strategies:
Fact Sheet: The Biden Administration to Begin Distributing At-Home, Rapid COVID-19 Tests to Americans for Free, January 14, 2022. https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/14/fact-sheet-the-biden-administration-to-begin-distributing-at-home-rapid-covid-19-tests-to-americans-for-free/. Accessed January 15, 2022.
Biden-Harris Administration Requires Insurance Companies and Group Health Plans to Cover the Cost of At-Home COVID-19 Tests Increasing Access to Free Tests, January 10, 2022. Biden-Harris Administration Requires Insurance Companies and Group Health Plans to Cover the Cost of At-Home COVID-19 Tests, Increasing Access to Free Tests | HHS.gov. Accessed January 15, 2022.
PSG offers this material for general information only. PSG does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.