The Department of Labor (DOL), Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS) jointly issued guidance on a new requirement that individual and group health plans must cover over-the-counter (OTC) COVID-19 diagnostic tests. These tests must be covered without cost-sharing, prior authorization, or other medical management requirements, subject to some limitations. The requirement applies to both grandfathered and non-grandfathered health plans.

This new coverage requirement is effective as of January 15, 2022, but the additional guidance wasn’t released until January 10, 2022. Some health plans have been in a rush to get this new coverage requirement operational, and it’s expected a lot of insurance companies will be providing additional details in the coming days and weeks. Some insurance companies have already started providing communications about the new coverage requirement and their procedures.

Health plans are encouraged (but not required) to provide direct coverage by paying the sellers of the OTC COVID-19 diagnostic tests instead of having a person pay out-of-pocket and then have to submit a claim for reimbursement. If the health plan cannot pay the seller of the OTC COVID-19 diagnostic tests directly, then a person will have to file a manual claim under the procedures established by the health plan.

Health plans can and likely will establish relationships with preferred sellers of OTC COVID-19 diagnostic tests; however, health plans cannot limit coverage to only preferred sellers. If an individual purchases an OTC COVID19 diagnostic test from a non-preferred seller, the health plan can cap the payment or reimbursement at $12 (or the actual price, if lower).

There are quantity limits for required coverage. Health plans may limit coverage for OTC COVID-19 diagnostic tests to eight (8) tests per person per 30-day period (or per calendar month). Health plans also will likely establish procedures as an effort to prevent fraud and abuse. For example, they will want to try and ensure these tests will not be resold by the claimant.