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Article | Insider

FAQs provide flexibility in coverage of OTC COVID-19 tests

By Anu Gogna , Benjamin Lupin and Kathleen Rosenow | February 16, 2022

Recent FAQs give employers greater flexibility during supply shortages of home COVID-19 tests and cover “double-dipping” concerns surrounding account-based plans such as health savings accounts.
Health and Benefits
Risque de pandémie

The Departments of Labor, Health and Human Services, and the Treasury have issued Affordable Care Act FAQs Part 52 on the coverage of over-the-counter (OTC) COVID-19 tests authorized by the Food and Drug Administration (FDA). The new guidance provides flexibility for group health plans and issuers in how they meet certain direct coverage requirements, effective February 4, 2022. The FAQs also address how the requirements interact with account-based plans, such as flexible spending accounts (FSAs), health reimbursement arrangements (HRAs) and health savings accounts (HSAs).


On January 10, 2022, the Departments issued FAQs Part 51, which provided that group health plans and health insurance issuers must cover at least eight free OTC COVID-19 tests per person per month purchased on or after January 15, 2022, and throughout the public health emergency — without cost sharing, prior authorization or other medical management requirements. These include those tests purchased without a prescription or individualized clinical assessment from a healthcare provider.1

Employees enrolled in group health plans can buy an OTC COVID-19 test online or at a pharmacy or store and either get the test paid for at the point of sale by their health plan (“direct coverage”) or pay for the test upfront and then get reimbursed by submitting a claim to their health plan.

The Part 52 FAQs clarify the direct coverage program safe harbor and modify some of the previous guidance, as discussed below.

Direct coverage program safe harbor

Under the direct coverage program, the plan or issuer sets up a network of preferred pharmacies or retailers (including the direct-to-consumer shipping program) where plan participants can buy their OTC COVID-19 tests with no upfront out-of-pocket costs or need to request reimbursements. Plans and issuers may limit reimbursement of tests purchased outside of that network to $12 (or the cost of the test, if lower).

The recent guidance clarifies the following issues related to the direct coverage program safe harbor:

  • In general, OTC COVID-19 tests must be made available through at least one direct-to-consumer shipping mechanism and at least one in-person mechanism.
  • For a direct-to-consumer shipping program, plans and issuers must cover reasonable shipping costs in the same way they cover shipping costs for other items or products provided by the plan or issuer via mail order.
  • Plans or issuers are not required to make all OTC COVID-19 tests available to participants through the direct coverage program (although all FDA-approved tests must be covered either inside or outside of the direct coverage program, except as otherwise provided in the guidance).
  • The Departments will not consider a plan or issuer to be in noncompliance if it is unable to provide adequate access to covered tests due to a supply shortage.

Other guidance

  • Only OTC COVID-19 tests that are self-administered and self-read must be covered. Coverage is not mandated for COVID-19 tests that must be processed by a lab or other healthcare provider.
  • A plan or issuer may establish a policy that only OTC COVID-19 tests purchased from established retailers will be covered (i.e., plans may decline reimbursing tests purchased from a private individual or via online auctions, resale marketplaces or resellers).
  • The cost of OTC COVID-19 tests paid or reimbursed by a plan or issuer cannot also be reimbursed by a health FSA, HRA or HSA (i.e., no “double-dipping”). Plans and issuers should consider notifying participants not to seek such reimbursement and not to use a health FSA, HRA or HSA debit card to purchase the tests.

Going forward

  • Employer plan sponsors using a direct coverage program should work with their third-party administrators, pharmacy benefit managers or issuers to ensure the safe harbor is being met and to determine whether the flexibility allowed by the Departments should be incorporated into their program.
  • Employer plan sponsors should inform participants of how to access OTC COVID-19 tests for either direct coverage or reimbursement.
  • Employer plan sponsors should consider establishing a written policy disallowing reimbursement of OTC COVID-19 tests purchased from certain resellers.


1 For more information on FAQs Part 51, see “Departments issue FAQs on coverage of over-the-counter COVID-19 tests,” Insider, January 2022.

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Insider February 2022 PDF .1 MB

Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

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