On February 4, 2022, clarification and additional guidance on the coverage requirement for at-home over-the-counter (OTC) COVID-19 tests, including tests obtained without an order from a health care provider, was released by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments) via FAQs Part 52. These FAQs clarify guidance originally explained in FAQs Part 51, as described in our previous blog post Coverage Required for COVID-19 At-Home Tests.


To meet the coverage requirement for OTC COVID-19 tests, insurers and group health plans must either (1) identify preferred pharmacies/retailers where participants can obtain direct coverage of OTC COVID-19 tests for free (with no need to submit a claim), or (2) reimburse covered individuals for the entire cost of OTC COVID-19 tests purchased after the submission of a claim. Part 51 establishes a safe harbor to promote direct coverage of OTC COVID-19 tests without upfront cost to a covered individual at the time of purchase. See Q2 of Part 51. When OTC COVID-19 tests are purchased from a plan or insurer’s identified preferred pharmacy or retailer at no cost to the covered individual at time of purchase, any COVID-19 test purchased outside of the network is capped at a $12 per test reimbursement (or actual cost of the test, whichever is less). Otherwise, the entire cost of the COVID-19 test must be reimbursed (and is not limited to a $12 maximum benefit per test) if direct coverage is not provided via a preferred network. Importantly, Q2 of Part 51 explains that direct coverage should be supplied via a preferred pharmacy network and a direct-to-consumer shipping program providing ‘adequate access’ for covered individuals.

New Guidance

In response to questions received since issuing Part 51, the Departments clarify coverage requirements for OTC COVID-19 tests. First, Q1 explains that ‘adequate access’ to OTC COVID-19 tests without upfront expenses will generally require coverage available through, at minimum, one direct-to-consumer shipping and one in-person retailer. Ultimately, whether access to OTC COVID-19 tests without upfront cost to the covered individual is ‘adequate’ will depend on the facts and circumstances. The Departments explain that adequate access will not require a plan or insurer to make all OTC COVID-19 tests meeting the statutory criteria available to covered individuals (e.g., plan or insurer can limit coverage to certain manufacturers if adequate access is still provided based on the facts and circumstances). See Q1 of Part 52 for additional information regarding adequate access and mechanisms to provide direct coverage, including limited circumstances where both a direct-to-consumer and in-person retailer may not be required. Of note, the guidance in Q1 is applicable prospectively, effective February 4, 2022.

The FAQs further explain that:

  • The Departments will not take enforcement action if an insurer or plan is unable to provide adequate access to OTC COVID-19 tests via direct coverage due to a supply shortage. In this circumstance, insurers and plans can still limit reimbursement to $12 per test (or the actual cost of the test, if lower) for tests purchased outside of the direct coverage program, so long as the requirements of the safe harbor are otherwise met.
  • Plans and insurers can take reasonable steps to address potential fraud, which can include a policy that requires proof of purchase (e.g., UPC code), original receipt, or other similar documentation.
  • This coverage requirement does not apply to COVID-19 tests that are self-collected specimen but require processing by a laboratory or similar. See Q4 of Part 52. However, such tests may otherwise be covered in compliance with the FFCRA (Families First Coronavirus Response Act) when certain criteria is met (e.g., when ordered by a health care provider).

Lastly, Q5 reiterates that while the cost of an OTC COVID-19 test is a medical expense that is generally covered by a health FSA or HRA, an individual cannot be reimbursed more than once for the same medical expense (as ‘double dipping’ is prohibited). Similarly, an OTC COVID-19 test that is paid or reimbursed by a plan is not an HSA qualified medical expense (which are those medical expenses that are not otherwise compensated for by insurance). In other words, this means that the cost of an OTC COVID-19 test covered or reimbursed by a plan cannot also be paid for or reimbursed by a health FSA, HRA, or HSA.

Employer Action

In light of the clarifications provided by Part 52, employers may need to discuss with their insurers (for fully insured plans) or TPAs (for self-insured or level-funded plans) to confirm compliance with this coverage requirement and identify any direct coverage preferred providers/retailers. Additionally, employers should:

  • Communicate to covered individuals how to access OTC COVID-19 tests without upfront costs, as applicable (or employers may rely on their insurance carriers and/or TPA to provide such communications) and, if the plan limits coverage for certain OTC COVID-16 tests or from certain retailers, this should also be communicated; and
  • Remind covered individuals that they cannot ‘double dip,’ as the cost of an OTC COVID-19 test covered by a plan cannot also be reimbursed or paid by a health FSA, HRA, or HSA.

Additional Resources

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2022 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Diane Cross — Diane is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Diane enjoys spending time with her family, live music, and cycling.