Biden Administration Requires Insurance Companies and Group Health Plans to Cover the Cost of At-Home COVID-19 Tests

The Biden Administration is requiring insurance companies and group health plans to cover the cost of over-the-counter, at-home COVID-19 tests, so people with private health coverage can get them for free starting January 15, 2022. The new coverage requirement means that consumers with private health coverage can go online or to a pharmacy or store, buy a test, and either get it paid for up front by their health plan, or get reimbursed for the cost by submitting a claim to their plan.

Beginning January 15, 2022, individuals with private health insurance coverage or covered by a group health plan who purchase an over-the-counter COVID-19 diagnostic test authorized, cleared, or approved by the U.S. Food and Drug Administration (FDA) will be able to have those test costs covered by their plan or insurance. Insurance companies and health plans are required to cover 8 free over-the-counter at-home tests per covered individual per month. That means a family of four, all on the same plan, would be able to get up to 32 of these tests covered by their health plan per month. There is no limit on the number of tests, including at-home tests, that are covered if ordered or administered by a health care provider following an individualized clinical assessment, including for those who may need them due to underlying medical conditions.

Over-the-counter test purchases will be covered in the commercial market without the need for a health care provider’s order or individualized clinical assessment, and without any cost-sharing requirements such as deductibles, co-payments or coinsurance, prior authorization, or other medical management requirements.

As part of the requirement, the Administration is incentivizing insurers and group health plans to set up programs that allow people to get the over-the-counter tests directly through preferred pharmacies, retailers or other entities with no out-of-pocket costs. Insurers and plans would cover the costs upfront, eliminating the need for consumers to submit a claim for reimbursement. When plans and insurers make tests available for upfront coverage through preferred pharmacies or retailers, they are still required to reimburse tests purchased by consumers outside of that network, at a rate of up to $12 per individual test (or the cost of the test, if less than $12). For example, if an individual has a plan that offers direct coverage through their preferred pharmacy but that individual instead purchases tests through an online retailer, the plan is still required to reimburse them up to $12 per individual test. Consumers can find out more information from their plan about how their plan or insurer will cover over-the-counter tests.

CARES Act Expands Usages for HSAs, FSAs, and HRAs

The Coronavirus Aid, Relief, and Economic Security Act (CARES ACT) was signed into law by the President on Friday.

There are three direct inclusions that immediately expand the usage of health savings accounts (HSA), flexible spending accounts (FSA), and health reimbursement arrangements (HRA) for employees.

1. Telehealth services can now be covered pre-deductible under a High Deductible Health Plan. The end date of this provision is Dec 21, 2021.

2. Over the counter (OTC) drugs and medicines are now eligible for reimbursement from an HSA, FSA or HRA. This is a permanent change.

3. Menstrual products are now eligible for reimbursement from an HSA, FSA or HRA. This is a permanent change.