On February 4, 2022, the U.S. Department of Labor (DOL), U.S. Department of the Treasury, and U.S. Department of Health and Human Services (HHS) issued subregulatory guidance that provides greater flexibility and clarifies a few points on the required coverage of over-the-counter (OTC) COVID-19 tests, which took effect for employer health plans and health insurers on January 15, 2022. The guidance, in the form of frequently asked questions (FAQs), expands on the agencies’ prior guidance, which was issued last month. That initial guidance outlined the required coverage under section 6001 of the Families First Coronavirus Relief Act (FFCRA) and established enforcement safe harbors for plans and insurers.

Key points from these most recent FAQs include the following:

• The guidance gives plans and insurers more flexibility in how they satisfy the safe harbor that permits capping reimbursements at $12 per test if they provide “adequate access” to tests through both a pharmacy network and a direct-to-consumer shipping program. This new guidance confirms that in order to provide “adequate access,” the plan or insurer must make coverage available with no upfront cost-sharing through at least one direct-to-consumer shipping option and at least one in-person purchase mechanism. These may be accomplished through online or telephone orders to a direct-to-consumer shipping program, the plan’s pharmacy network, other non-pharmacy retailers (including through the distribution of coupons for use at non-pharmacy retailers), or alternative test distribution sites.

• When providing coverage through a direct-to-consumer shipping program, the plan or insurer must cover reasonable shipping costs.

• A plan or insurer will not be subject to enforcement action by the departments if it is temporarily unable to offer adequate access to its direct coverage program due to a test supply shortage, and it may continue to apply a $12-per-test cap.

• To discourage fraud and abuse, plans and insurers may limit coverage to tests purchased from established retailers and exclude coverage of any test purchased from a private individual or from a seller that uses an online auction or resale marketplace. The plan or insurer may also require reasonable documentation of the purchase, such as a universal product code (UPC), serial number, or an original receipt from the retailer, and an attestation from the covered person that the test has not been and will not be reimbursed from another source.

• The safe harbor does not require plans and insurers to cover “all” COVID-19 tests on the market. Depending on the facts and circumstances, for example, a plan may be able to cover tests from a limited number of manufacturers, such as those with which it contracts directly.

• The departments have clarified that the OTC test coverage requirements apply only to those COVID-19 tests that can be obtained without a prescription and used and processed without physician or laboratory involvement. COVID-19 tests in which samples are self-collected and then sent to laboratories for processing are not subject to these rules. However, if such a test is ordered by a healthcare provider and otherwise meets the requirements of Section 6001 of the FFCRA, it must be covered by the plan or insurer without cost-sharing as required by the FFCRA.

• Although an OTC COVID-19 test may be an eligible medical expense under an account-based plan, such as a health flexible spending account (FSA) or a health reimbursement arrangement (HRA), a participant cannot be reimbursed more than once for an expense. Therefore, the guidance indicates, if his or her medical plan covers a test, a participant may not also seek reimbursement from an FSA or HRA.

• Similarly, someone who has been reimbursed for a test through a medical plan may not also take a distribution from his or her health savings account (HSA) for the cost of the test. A participant who mistakenly takes such an HSA distribution must include the amount in his or her taxable income or repay the amount to the HSA in accordance with Internal Revenue Service (IRS) rules.

• Finally, the guidance emphasizes that plans and issuers should ensure they communicate key information about where and how participants, beneficiaries, and enrollees may take advantage of the coverage of OTC tests, as well as information about any restrictions that apply.