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Health Plan Coverage for OTC COVID-19 Tests

By Erica Honig, Compliance Director, Employee Benefits


Health Plan Coverage for OTC COVID-19 Tests

Starting January 15, 2022, health plans and insurers are required to cover over-the-counter (OTC) COVID-19 tests at no cost for covered individuals, according to recent joint federal agency guidance. On January 10, 2022, the Department of Health and Human Services (HHS), together with the Department of Labor (DOL) and the Department of the Treasury released FAQ guidance requiring health plans and insurers to cover OTC COVID-19 tests at no cost in an effort to enable people to easily and affordably screen for infection and limit the spread of the Omicron variant.

Health plans and insurers are required to cover OTC COVID-19 tests either by providing them free of charge directly to covered individuals or by reimbursing covered individuals who pay upfront for the tests and submit claims. These OTC tests must be authorized, cleared or approved by the U.S. Food and Drug Administration (FDA) and must be provided without imposing any cost-sharing (deductibles, copayments and coinsurance), prior authorization or other medical management requirements. Further, these covered OTC tests are not required to be administered or ordered by a health care provider and coverage.

Eight Tests Covered per Month

Health plans and insurers are required to cover eight tests per month for each covered individual. A family of four, all covered under same health plan, can be reimbursed for up to 32 tests a month. Health plans and insurers cannot set a limit to the number of these tests over a shorter period, such as limiting to four tests per individual, per 15-day period. Note the eight-test limit does not apply to OTC tests administered or ordered by a healthcare provider – there is no limit for those tests.

Preferred Pharmacy/Retailer Network for Convenience

The guidance strongly encourages health plans and insurers to set up a network of convenient locations, such as pharmacies, retailers (including online retailers) and mail order programs, where covered individuals can conveniently access the OTC tests for free, rather than having to pay upfront and submit claims for reimbursement. Health plans and insurers must still permit covered individuals to purchase OTC tests outside of this preferred network but may limit reimbursement for OTC tests from non-preferred pharmacies/retailers to $12 per test or the actual cost of the test, whichever is lower. This reimbursement limit must be calculated based on the number of tests in a package.

If a health plan or insurer does not establish a process through which covered individuals can obtain OTC tests with no upfront costs, then the plan/insurer is required to reimburse the full cost of the test, even if the test costs more than $12. For example, if a covered individual pays out-of-pocket for a two-pack OTC test for $34 and the plan/insurer has not set up a process to cover costs upfront, then the plan/insurer must reimburse the covered individual $34 instead of $24.

Steps to Prevent Fraud and Abuse

Health plans and insurers may take reasonable steps to ensure that an OTC COVID-19 test for which a covered individual seeks coverage under the plan for the individual’s own personal use (or use by another covered individual as a member of the individual’s family), provided that such steps do not create significant or unreasonable barriers to obtain these tests. For example, a plan/insurer may require a covered individual to sign an attestation document attesting that the OTC test was purchased solely for personal use, not for employment purposes, has not been (and will not be) reimbursed by another source, and is not for resale. Note that the guidance clearly states that plans/insurers are still not required to cover OTC tests for employment purposes.

Health plans and insurers may also require reasonable documentation of proof of purchase with a claim for reimbursement for the cost of an OTC COVID-19 test such as a UPC code for the OTC COVID-19 test and/or a receipt from the seller of the test with the date of purchase and the price listed.

Plan Information and Support Resources

The guidance allows health plans and insurers to provide information and support resources to covered individuals attempting to access, use and seek coverage for OTC COVID-19 tests such as:

  • Instructions on how to obtain OTC COVID-19 tests directly covered by a health plan through its preferred pharmacy/retailer network and an applicable direct-to-consumer shipping program.

  • Instructions on how to submit a claim for reimbursement, including electronic and paper filing options as well as required information and documentation for claims processing.

Effective Date:

Health plans and insurers must provide coverage without cost-sharing, prior authorization or other medical management requirements for OTC COVID-19 tests obtained or purchased by covered individuals on or after January 15, 2022.

Employers are advised to immediately connect with their Risk Strategies account team and carriers/TPAs to comply with these new rules as the January 15, 2022 compliance date is approaching very quickly.


The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.

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