On February 4, 2022, the Department of Labor, Health, and Human Services and the Treasury (“Departments”) issued additional Frequently Asked Questions (FAQs) regarding group health coverage of over-the-counter covid-19 tests (OTC tests) plans, without participant cost sharing, pre-approval or medical management. February Frequently Asked Questions provide clarification of the frequently asked questions that departments sent out in January on this topic. [See our blog GROUP HEALTH PLANS MUST PAY FOR OVER-THE-COUNTER AT-HOME COVID-19 TESTS].
The recently released FAQ clarifies and expands the introductory guide as follows:
- Flexibility in establishing direct to consumer shipping facility and direct coverage safe port. January-frequently asked questions provided a “safe haven”, according to which if the group’s health plan provides direct coverage of OTC tests at no direct direct cost through both its personal pharmacy network and a direct-to-consumer shipping program, the plan may limit OTC reimbursement tests purchased from non-preferred pharmacies or retailers for $ 12 per test or the price of the test, whichever is less. February FAQs provide greater flexibility in how group health schemes can provide adequate access to OTC testing through their direct coverage program. For example, a direct-to-consumer shipping program may include online or telephone ordering and may be delivered through a pharmacy or other retailer, the plan directly, or any other device on behalf of the plan or device. February Frequently Asked Questions note that a direct-to-consumer shipping program does not have to provide exclusive access through a single device as long as it allows attendees to place an order for OTC testing to be sent directly to them. For example, if the plan has chosen to provide direct personal coverage of OTC tests through specified dealers, and these dealers maintain online platforms where individuals can also order tests to be delivered to them, departments will consider the plan to have provided an opportunity for directly to consumer shipping.
- Coverage of shipping costs. February Frequently Asked Questions clarify that when OTC tests are delivered through a direct-to-consumer shipping program, the plan must cover reasonable shipping costs related to the OTC tests in a manner consistent with other goods or products provided by the plan by mail order. However, a plan that meets the requirements of the safe harbor may limit the total reimbursement to $ 12 per. test (or the full cost of the test, if less) for OTC tests purchased outside the direct coverage program, including shipping and sales tax.
- Supply shortage problems. February’s frequently asked questions clarify that a group health plan would not be inconsistent with safe harbor if it established a compatible direct coverage program but is temporarily unable to provide adequate access due to lack of OTC testing. If this happens, the plan may limit the refund to $ 12 (or the full price, whichever is lower) for OTC tests purchased outside the direct coverage program.
- Fraud and abuse. Plans may establish a policy that limits the coverage of OTC tests to tests purchased from established retailers who are typically expected to sell OTC tests. Plans may reject refunds for the purchase of OTC tests from individuals, online auctions or resale markets.
- Home Collection PCR tests. The frequently asked questions from February clarify that group health plans are not required to cover COVID-19 tests that use a self-collected sample but require treatment by a laboratory or health care provider. However, these types of tests may be covered by other departmental guidelines.
- Impact on FSA, HRA and HSAs. February Frequently Asked Questions note that the cost of OTC testing purchased by an individual is a medical expense that can be reimbursed by a Health Flexible Expenditure Scheme (FSA) and a Health Reimbursement Scheme (HRA). However, since a person cannot be reimbursed more than once for the same expense, OTC tests paid for or reimbursed by a group health plan cannot be reimbursed by a health FSA or HRA. Similarly, expenses incurred for OTC testing paid for or reimbursed by a plan are not qualified medical expenses for the purpose of distributions from a person’s health savings account (HSA). If a person erroneously receives reimbursement from the FSA or HRA for OTC tests that have been reimbursed by the group health plan, that person must correct the erroneous reimbursement in accordance with the plan’s correction procedures. Employers may want to advise individuals not to use a health FSA or HRA debit card to purchase OTC tests that the individual intends to seek reimbursement from the group’s health plan.