Group Health Plans Must Pay for Over-the-Counter At-Home COVID-19 Tests: What Employers Need to Know

An image of a medical worker holding a small vial.
Health plans must cover the cost of at-home COVID-19 tests. As an employer, there are a few things you need to know about this new rule.

Key points about rapid at-home COVID-19 tests:

  • Health plans and insurance carriers must cover the cost of at-home over-the-counter COVID-19 tests.
  • There are no explicit requirements for employers. Just contact your carrier or administrator to understand how they plan to comply.
  • However, you may want to take additional steps to educate your employees and control your benefit costs.

New guidance requires health plans and insurance carriers to cover the cost of certain at-home COVID-19 tests. If you offer an employer-sponsored health plan, there are a few things you need to know about this new rule.

What are rapid at-home COVID-19 tests?

Rapid at-home tests detect COVID-19 infection (typically through a nasal swab). People can administer these tests themselves to see if they’re infected. While these at-home over-the-counter tests aren’t perfect, they can help reduce the spread of infection and ensure people seek the appropriate medical attention. 

Throughout the pandemic, though, rapid tests have been expensive and hard to obtain. To make the tests more accessible, the Biden administration created a new rule that requires health plans to cover or reimburse the cost of at-home over-the-counter COVID-19 tests.

What is the new coverage requirement for at-home COVID-19 tests?

Starting January 15, 2022, health plans must cover the cost of over-the-counter (OTC), FDA-approved COVID-19 diagnostic tests. This means that anyone covered by an employer-sponsored group health plan or private health insurance can purchase an approved test at no personal cost. They do not need a health care provider’s order or a clinical assessment. When these individuals buy a test kit, their health plan or insurance carrier will:

  • Pay for the cost of the test upfront, or
  • Reimburse the individual for the cost of the test once they submit a claim

Both options are viable. However, the guidance encourages group health plans and carriers to set up a network of preferred pharmacies, stores, and retailers. When an individual purchases a test from one of these preferred retailers, their health plan can cover the cost of the test directly. With direct coverage, the individual won’t need to submit a claim for reimbursement.

The health plan or carrier will still need to reimburse people when they purchase at-home tests outside of the preferred network, though. They must reimburse individuals $12 per test or the cost of the test (whichever is less).

Do employees need to cover any of the costs?

No, covered individuals will not need to cover any costs.

Note: This requirement was set to take effect on January 15. However, many insurers’ systems are still unable to cover the cost of tests at the time of sale. As a result, experts advise anyone who purchases a test kit to keep their receipt and the test kit packaging. They may need to submit these as proof of purchase for reimbursement. 

How many home COVID-19 tests are health plans and insurance carriers required to cover?

Insurance companies and health plans are required to cover the cost of up to eight OTC at-home COVID-19 tests per covered individual per month. For example, a family of four all on the same health plan can get up to 32 individual COVID-19 tests per month for free.

There are some important distinctions, though. For one, health plans can not limit the number of tests they cover if a healthcare provider orders or administers COVID-19 tests after a clinical assessment. However, health plans are not required to cover the cost of routine testing for employment purposes (like employer-mandated testing). They can also take reasonable steps to deter fraud and abuse, such as someone claiming free tests and reselling them for personal profit.

For more detailed information about this rule, please see the Department of Labor’s FAQs.

What do employers need to do?

There is no direct action you need to take in order to stay compliant. If you offer a fully-insured plan, just contact your carrier to be sure you understand how they aim to meet the coverage requirements. If you offer a self-insured plan, ask your third-party administrator which vendor will be responsible for compliance.

This rule can still have implications for you and your employees, though. Since the Supreme Court overruled Biden’s vaccine mandate for employers with 100 or more employees, it’s likely that testing will continue to play an important role in workplace safety. Similarly, the added expense of home tests could drive up your benefits costs.

If you offer an employer-sponsored health plan, here are some things to keep in mind regarding this new requirement:

Cost control

Employee benefits are necessary to attract and retain talented employees. But they can be expensive. Now that health plans need to cover the cost of over-the-counter COVID-19 tests, employee benefits may become even more expensive. 

Likewise, as noted above, health plans and insurance carriers are not required to cover the cost of at-home testing for employment purposes. This means that if you require your employees to get tested, you may need to pay for the testing yourself. There are a few ways you can prepare for these added, perhaps unexpected costs:

Estimate the average cost of tests for covered individuals

First, estimate the total cost of at-home tests for covered individuals. According to the mandate, health plans must cover the cost of eight tests per person per month. The average cost of a rapid at-home test is $15. As a result, your plan may need to cover $120 per person per month in testing. 

Of course, not everyone will need eight tests each month. Still, performing this calculation for your workforce can help you plan accordingly throughout the year. Reach out to your health plan consultant for additional assistance.

Use a pharmacy network or preferred retailer program

If you can, encourage your employees to get their tests from a pharmacy network or preferred retailer program. This way, your plan can cover the cost of tests upfront when employees buy them from preferred pharmacies, stores, and retailers. 

Without a preferred retailer program, your employees may purchase tests from various providers. Health plans must reimburse each person $12 per test or the cost of the test (whichever is less). If employees purchase test kits from different providers, they may end up paying more than $12 for each test. If you choose to reimburse your employees for the full cost of test kits, this could increase your expenses substantially. 

Employee education

Because your employees may need to purchase at-home tests, it’s important that they understand the coverage requirements. Make sure your employees know:

  • Which tests are covered (this includes FDA approval requirements, plus the difference between at-home over-the-counter tests and tests performed or ordered by a provider or processed in a lab)
  • How to get tests directly from the plan, a pharmacy network, or a preferred retailer
  • How to submit a claim for reimbursement

Providing this information can help you avoid potential misuse and added costs. It can also reduce employee confusion and frustration. Your health plan or insurance carrier should have educational resources you can share with your employees. If not, this set of FAQs from the Centers for Medicare and Medicaid Services can help.

How to help employees get free COVID-19 tests without health insurance

If you do not offer health insurance, or if you have employees who are not enrolled in coverage, there are still resources you can share with your employees. Everyone, including those without health insurance, can obtain free COVID-19 testing from:

  • – Each home in the United States is eligible for a set of 4 free over-the-counter COVID-19 tests. Sponsored by the Federal government, these tests will be delivered by the United States Postal Service. 
  • Community-Based Testing Sites for COVID-19 – Sponsored by the Department of Health and Human Services, select health centers, pharmacies, and testing sites across the United States offer free COVID-19 testing.

The new coverage requirement for at-home tests is only the latest piece of COVID-19-related legislation. Unfortunately, it doesn’t look to be the last, either. Keeping up with ever-changing rules and regulations can be complex, especially in the midst of a pandemic. At Sentric, we’re committed to providing our clients top-notch employee benefits programs. To learn more about what we do, speak with one of our product experts today!


The Sentric Team

The Sentric Team

At Sentric, we help businesses make people management easier with industry-leading technology and standout support.

Sentric HR & Payroll Insights

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