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As the nation responds to the ongoing COVID-19 public health emergency, the benefits world continues to adapt. Recently, the Biden administration required insurance companies and health plans to cover the cost of at-home or over-the-counter (OTC) COVID-19 tests.
The Department of Labor (DOL) Employee Benefits Security Administration (EBSA)-in conjunction with the Departments of Health and Human Services and the Treasury (collectively, the "Agencies")-issued guidance on January 10, 2022, clarifying that group health plans and issuers must provide coverage of OTC home COVID-19 tests without participant cost-sharing, preauthorization, or medical management. There is now additional information for those participating in a Flexible Spending Account (health FSA), Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA).
Updated guidance
On February 4, 2022, the Agencies released new guidance in the form of Frequently Asked Questions (FAQs)1 addressing the White House's ongoing expansion of "Free At-Home Testing for Americans." In the newest set of FAQs (specifically, Q&A-5), the Agencies reiterate the general prohibition against individuals participating in a health FSA, HSA, or HRA from seeking reimbursement under one of these plans and having the health plan-which is now required to cover these OTC COVID-19 tests-pay for the same medical expense.
What does this mean?
The Agencies are asking health plans and issuers to advise individuals not to seek reimbursement from a health FSA or HRA for the cost of OTC COVID-19 tests paid or reimbursed by the plan or issuer. Additionally, the Agencies recommend individuals not use a health FSA or HRA debit card to purchase the OTC COVID-19 tests. In plain English, the updated guidance strives to avoid any reimbursement "double-dipping." Review the newest set of FAQs.
What's next?
HealthEquity will continue to monitor agency guidance on this matter and provide updates accordingly. Please note that HealthEquity does not provide tax advice or legal advice. The government's guidance is complex and very fact-specific. As always, we strongly encourage employers and plan sponsors to consult competent legal or benefits counsel for all guidance on how the actions apply in their circumstances.
HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions.
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