COVID-19, Employee Benefits Compliance

Group Health Plans Mandated to Cover At-Home COVID-19 Tests

at-home COVID test

The Departments of Labor, Health and Human Services, and Treasury jointly issued a new rule via Frequently Asked Questions mandating that group health plans (“Plans”) cover the cost of at-home COVID-19 tests (“Tests”). These rules are effective January 15, 2022, until the end of the public health emergency. Plans must:

  • Arrange to provide Over-The-Counter (“OTC”) COVID-19 tests free of charge through the Plan’s usual pharmacy, retail network, or direct delivery system, or,
  • Reimburse the cost of the test after purchase.
    • May request reasonable proof of purchase – such as the UPC code to verify FDA-approval, or a receipt showing the date of purchase and price.

Previously, plans were required to cover the cost of FDA-approved tests only with the involvement of a healthcare provider. With the addition of new tests that are easy to self-administer and read, calls to cover these tests for diagnostic or preventative purposes has increased. The White House called on regulators to clarify coverage of at-home tests, leading to this latest expansion of test coverage and reimbursement.


  • Food and Drug Administration (FDA) approved test.
  • Plans must cover the cost of tests beginning January 15, 2022, and may voluntarily choose to do so prior to this date.
  • Plan must take reasonable steps ensuring plan participant access to OTC tests through a sufficient amount of in-person and online sources.
  • Must provide dates direct coverage is available with a list of participating retailers or other sources.
  • May not mandate use of preferred pharmacies or retailers unless safe harbor below met.

Cost Containment Safe Harbor / Limits

Plans that created a network providing free OTC tests in order to limit reimbursement for out-of-network (OON) test purchases may use the cost limit of the lesser of the cost of the test of $12 per test. The safe harbor limit is not available if the following occurs (in which full reimbursement must be made by the plan):

  • Plan is unable to provide a free test due to significantly longer delays (undefined yet) for the tests compared to other covered items.
    • Where this occurs, the plan cannot impose limits or deny coverage for tests, including tests purchased from non-network sources.
  • Plan is without a network to provide free point-of-sale OTC tests.

Each covered plan participant is eligible for up to eight (8) OTC tests per month (a family of four enrolled in family coverage is eligible for thirty-two (32) tests per month. This limit is only available for plans not imposing any other cost-containment measure, such as prior authorization, medical management conditions, or the like related to receiving the OTC test.

Workplace Mandated Tests Excluded

This is an important exclusion to this new rule especially relevant as the Supreme Court of the United States (SCOTUS) is deciding the fate of the employer vaccine mandates that requires many employers to require vaccination or weekly negative tests. See the prior Leavitt Group article on this topic. This means employers in many states may pass the cost of workplace mandated tests along to employees or be forced to absorb the costs of COVID-19 tests as part of their safety budget and tax write-offs. California is just one state that does not allow employers to pass along the cost of COVID-19 tests for workplace safety as well. Utah goes a step further by prohibiting employers from maintaining records of vaccination in most cases and allowing an additional exemption for sincerely held personal relief and not just medical or religious beliefs. The rules vary and are evolving and ever-changing at this stage of the vaccination and testing debate. If you would like assistance understanding your state laws as it relates to the vaccine or test mandates, Leavitt Group can connect you with an employment attorney. Contact your Leavitt Group representative.

In order to ensure employee-plan participants are using the tests for diagnostic and not employment purposes, plans may require attestations in writing. For example:

I, Plan participant, attest to the following:

    • The COVID-19 at-home test is for personal use only, such as for diagnostic purposes or to prevent the spread and aid in early detection of COVID-19.
    • The Test is not for use to comply with workplace vaccine or test mandates.
    • Tests will not be resold.
    • Test will not be reimbursed from any other source.


Any verification steps must not be overly burdensome.

Action Required

Group health plan sponsors should work with their insurance carriers, Pharmacy Benefit Managers, and Third-Party Administrators to create and communicate the test networks and plan terms necessary to comply with these new rules. Reimbursement and coverage arrangements should begin as of January 15th, leaving little time to implement and create the necessary communications to plan participants. Plan documents may need to be updated to include any new coverage but may do so within 60 days if considered a material or significant change to the plan and costs. Not all plans may warrant a plan amendment where similar coverage already exists and these tests are merely an addition. Work with your Leavitt Group representative, your trusted advisor, for your group health plan compliance needs.

Other Resources

Centers for Medicare & Medicaid Services FAQs

Health & Human Services Alert