UPDATED October 20, 2020: HHS extended the COVID-19 public health emergency, effective October 23, 2020 for the following 90 days. 

UPDATED September 14, 2020: Absent any extension by the Department of Health and Human Services (HHS), the COVID-19 public health emergency will end on October 23, 2020. The FFCRA requires group health plans to provide free COVID-19 testing during the COVID-19 public health emergency. This means that absent an extension by HHS, group health plans will only be required to provide free testing until October 23, 2020.

UPDATED July 1, 2020 with new DOL FAQs on COVID-19 testing. 

UPDATED May 19, 2020 with new IRS Guidance on HDHPs and COVID-19 testing. 

States and federal lawmakers have recently passed laws aimed at eliminating cost barriers for coronavirus (COVID-19) testing:

  • Congress has passed a law that would require all private insurers and government-run health care plans to provide COVID-19 testing without out-of-pocket costs. For uninsured individuals, the law would provide a reimbursement for costs associated with laboratory testing and allow States to extend Medicaid eligibility to these individuals for COVID-19 testing purposes. 
  • California, Washington state, and New York (and other states’) insurance regulators have ordered insurers to take actions related to COVID-19, including waiving out-of-pocket costs for covered individuals seeking testing and screening.
  • The IRS has released guidance that allows high deductible health care plans (HDHPs) to provide COVID-19 testing and the associated health care visit without any deductible.

The state orders, the recently passed federal bill, and IRS guidance are discussed in more detail below.


Federal Legislation on the Waiver of Out-of-Pocket Costs

On Wednesday, March 18th, the Families First Coronavirus Response Act (“Act”) was signed into law. The Act mandates the following regarding COVID-19 testing:

  • Private Group Health Plans: All private group health plans (including fully insured, self-insured, and grandfathered plans) must provide coverage for COVID-19 testing and the associated provider, urgent care, or emergency visit associated with the testing to plan participants without cost-sharing (including deductibles, co-payments, and coinsurance).
  • Government Plans: Medicare, Medicare Advantage, Medicaid, CHIP, TRICARE, and Indian Health Service plans must waive cost-sharing for COVID-19 testing and provider, urgent care, or emergency visits associated with that testing.
  • Uninsured Individuals:
    • States will have the option to extend Medicaid eligibility to uninsured individuals for the purpose of COVID-19 testing. The Federal government will cover the cost of this extension. 
    • The National Disaster Medical System will reimburse uninsured individuals for costs associated with COVID-19 laboratory testing.

The Department of Labor (DOL) has released FAQs, which clarify the COVID-19 testing requirements under the Act. Plans must cover COVID-19 tests that: 

  • Are approved, cleared, or authorized by the Food and Drug Administration (FDA); 
  • The developed has requested, or intends to request, emergency use authorization;
  • Is developed and authorized by a State; or 
  • Other tests that the Secretary of Health and Human Services (HHS) determines is appropriate. 

The Act does not limit the number of COVID-19 tests that are covered, as long as they are medically appropriate for the individual. However, the Act does not cover testing that is conducted to screen for general workplace health and safety (such as employee “return to work” programs) or for any other purpose not primarily intended for the individualized diagnosis and treatment of COVID-19. For additional information, see the DOL FAQs

State Orders

Prior to the passage of the federal Act, California, Washington and New York (among other states) ordered insurers to implement a variety of actions related to the coronavirus. These orders apply to insurers that are subject to California, Washington, or New York insurance laws. This means that individuals who are covered under insurance policies that are “written out” of these states will benefit from the new regulations.

The state orders do not apply to any self-insured health plans, which are not subject to state insurance laws, or plans written out of other states (but the federal Act does apply to these plans). Individuals who are covered under their employer’s self-insured plan, or who are covered by a plan that is not subject to these regulations, should contact their plan to determine the plan’s policies surrounding COVID-19.



On March 5, 2020, the California Department of Insurance Commissioner issued a bulletin that orders insurers to immediately eliminate cost-sharing for COVID-19 screening and testing. The bulletin directs all insurers providing commercial health insurance to:

  • Immediately eliminate cost-sharing (including, but not limited to, co-pays, deductibles, or coinsurance) for all medically necessary screening and testing for COVID-19. This includes cost-sharing for hospital, emergency department, urgent care, and/or provider office visits for the purpose of screening and testing for COVID-19.
  • Inform their contracted providers and plan participants:
    • Notify the insurer’s contracted providers that the above cost-sharing is waived;
    • Ensure the insurer’s nurse line and customer service representatives inform plan participants that the above cost-sharing is waived and provide instructions on how to access care for screening and treatment prior to in-person visits; and
    • Prominently display a statement on insurer’s public website that the above cost-sharing is waived and provide guidance on how plan participants can access care.
  • Work with their contracted providers to use telehealth services to deliver care when medically appropriate and to limit potential COVID-19 exposure.
  • If there is a shortage of any prescription drug and the plan participant’s provider recommends an alternative drug to treat their condition, insurers should waive prior authorization for that alternative drug.


On March 5, 2020, the Washington Insurance Commissioner issued an emergency order in response to the COVID-19 outbreak in the state. The order requires all health carriers to do the following through May 4, 2020:

  • Cover the cost for the health care visit and COVID-19 testing for plan participants who meet the Center for Disease Control (CDC) criteria for testing, as determined by their provider. Insurers must cover the cost prior to application of any deductible and with no cost-sharing by the individual.
  • Allow plan participants to obtain a one-time refill of their prescription medications prior their expiration date so they can maintain a supply of the medication.
  • Suspend any prior authorization requirements for covered diagnostic testing and treatment of COVID-19.
  • Provide out-of-network testing and treatment of COVID-19 at no greater cost than in-network rates if the insurer has insufficient number of in-network providers that can provide testing and treatment.

New York

On March 2, 2020, the Governor of New York issued a directive requiring New York insurers to waive cost-sharing for coronavirus testing. The Superintendent of the New York Department of Financial Services (DFS) plans on promulgating an emergency regulation that would require insurers to eliminate cost-sharing for in-network office, in-network urgent care, and emergency room visits for COVID-19 testing.

On March 3, 2020, DFS issued an Insurance Circular Letter, which instructed insurers to take  a variety of actions related to the coronavirus, as outlined below:

  • Keep plan participants informed of available benefits and quickly respond to inquiries. Insurers should make all useful information available on their website and staff their nurse help lines accordingly.
  • Waive cost-sharing for:
    • COVID-19 laboratory tests;
    • In-network provider office visits, in-network urgent care center visits, and emergency room visits when testing for COVID-19; and
    • Out-of-network testing for COVID-19, if in-network providers are unable to conduct testing.
  • Ensure their telehealth programs will be able to meet increased demand (under existing insurance laws, insurers cannot prohibit services that are otherwise covered under a comprehensive health insurance policy because the service is delivered via telehealth).
  • Provide access to out-of-network providers at the cost of in-network cost-sharing if insurers do not have in-network health care providers with the appropriate training and experience to meet the health needs of plan participants.
  • Expedite utilization review and appeals for medically appropriate services related to COVID-19.
  • Waive the cost for COVID-19 immunizations for recommended populations if a vaccine becomes available.  
  • Provide expedited access to non-formulary prescription drugs if there are disruptions in the supply of prescription drugs due to COVID-19.
  • Provide in-patient hospital care, emergency care, and ambulance services as required under existing insurance laws.

IRS Guidance: Waiver of Out-of-Pocket Costs and High Deductible Health Plans (HDHPs)

The IRS has confirmed in Notice 2020-15 that HDHPs, which are generally prohibited from providing benefits before an individual’s deductible is met, are permitted to provide benefits associated with the testing and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible for an HDHP. On May 19, 2020, the IRS released Notice 2020-29, which further clarified that Notice 2020-15 applied to expenses related to the testing and  treatment of COVID-19 incurred on or after January 1, 2020. 

Telehealth services not related to COVID-19: The CARES Act, which was passed by Congress on March 27, 2020, allows HDHPs to provide telehealth services with no cost sharing and before an individual’s deductible is met until December 31, 2021. On May 12, 2020, the IRS released Notice 2020-29,  which clarified that this CARES Act provision applies to telehealth services provided on or after January 1, 2020, with respect to plan years beginning on or before December 31, 2021. 

For more on the CARES Act, see our blog.


Sequoia Tech and Sequoia One Clients ONLY:

Sequoia Tech and Sequoia One program carriers have indicated compliance with the applicable state orders requiring insurers to waive out-of-pocket costs for plan participants seeking coronavirus testing and screening. Please refer to the following press releases for carrier specific information:

Additional Resources

Additional COVID-19 Related Resources: 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.