Although employers are no longer subject to OSHA’s mandate requiring their unvaccinated employees to test for Covid-19, some may choose to require testing themselves. One factor they should consider is whether they will be obligated to pay for the cost of these tests.
Since the early days of the pandemic, the CARES (Family First and Coronavirus Aid, Relief, and Economic Security) Act, laws and regulations have required group health plans to provide first-dollar coverage for Covid-19 tests administered. under medical supervision. Recently, the U.S. Departments of Health and Human Services, Labor, and Treasury released adviceexpand the scope of these regulations to include over-the-counter (OTC) Covid-19 testing coverage.
By requiring coverage of “at-home” testing, the guidelines significantly improve access to testing, but like previous regulations, they do not require coverage of all Covid-19 trials. Specifically, the regulations require coverage only of Covid-19 tests carried out for “diagnostic” purposes – not “surveillance”.
Job retention test
Demonstrating employment readiness is one such “monitoring” objective. Although the U.S. Supreme Court recently blocked the Occupational Safety and Health Administration from imposing a “vaccine or test” rule on companies with 100 or more employees, some employers are considering requiring that unvaccinated workers submit to a test as a condition of continued employment.
In the same vein, a Willis Towers Watson Inquiry (prior to the Supreme Court’s OSHA decision) reported that many employers plan to offer Covid-19 testing on a weekly basis. Some states and local authorities are also considering “vaccination or testing” mandates for employers.
Although previous guidelines and regulations under the Families First/CARES Act did not require coverage for testing for these purposes, health plans should be aware that they could still be covered. In particular, employers who “self-fund” health benefits for their employees may indirectly pay for the cost of testing through their health plans.
First, from a practical point of view, it is not necessarily clear whether a test is for “diagnostic” or “surveillance” purposes. Test results do not tell why a test was taken.
Given the ease with which employees can identify various symptoms associated with Covid-19, their possible exposure to others suspected of having Covid-19, or their desire to check before visiting loved ones – all generally considered an adequate basis for coverage – determining whether a test was employment-only is a challenge.
Exacerbating this challenge, regulations and guidelines under the Family First/CARES Act generally prohibit health plans from using prior authorization, screening, and other medical management techniques. to discover.
Indeed, the guidelines suggest that health plans can only rely on participants’ attestations that their tests were not for employment purposes. It also does not suggest a means by which health plans can tell if testing is being done for an employee to travel, access entertainment venues, or for other “surveillance” purposes.
Adding even more potential confusion in differentiating between which “at-home” tests should be covered and which are not, health insurance plans generally do not process pharmaceutical claims for “over-the-counter” products.
Even outside of regulations, the actual terms of an employer’s health insurance plan might require coverage for tests performed for employment purposes. Although previous DOL guidelines have stated that a group health plan cannot cover certain types of tests performed solely to determine work eligibility, case law and more recent DOL guidelines suggest otherwise.
Finally, some states may require employers to pay for the tests they ask their employees to take. At least six states – California, Illinois, Montana, New Hampshire, North Dakota and South Dakota – have passed laws that, while differing on important details, require employers to reimburse employees work-related expenses.
Pitfalls for Employers Who Cover Tests
Some employers may not want to pay for the tests their employees take as a condition of continued employment, but others may wish to. Reasons include keeping unvaccinated workers on the job, following state rules in the workplace, or meeting collective bargaining obligations.
Providing such cover, however, can create pitfalls for the unwary. Creating the device to pay for testing costs (outside of a group health plan) can create its own ERISA plan, including an “Employee Assistance Plan”. Such plans may then require compliance with complex rules and regulations, some of which may override state laws. Additionally, if not properly administered, on-site testing programs can raise HIPAA and other privacy concerns.
Whether or not self-funded employers mandate testing, they should be wary of excessive testing fees. Fortunately for employers, the guidelines cap OTC testing liability at $12/test for eight tests per month for each plan member, provided members can obtain tests from designated pharmacies at no upfront cost.
But similar safeguards do not apply so clearly to tests carried out under medical supervision. While costs for these tests vary, industry surveys have shown they cost an average of $130-$150, with out-of-network providers charging an average of 33% more. A CARES Act provision requiring health plans to pay an “amount equal to the cash price for such [testing] service as advertised by the provider on a public website” has, in the view of some industry observers, made health insurance plans vulnerable to price gouging and abuse.
In fact, relying on the wording of the CARES Act, some out-of-network test providers have filed lawsuits seeking to recover amounts approaching $500 per test. If they win, self-funded employers could ultimately be liable for excessive testing fees. Even at market prices, the unexpected costs of frequent testing can squeeze an employer’s healthcare budget.
For these reasons, self-funded employers should pay attention to the testing costs their health plans pay, especially if they require their unvaccinated employees to be tested.
In particular, employers should review the provisions of their health plans and state law, carefully follow ERISA requirements, and coordinate with their service providers to ensure the proper administration of Covid-19 test requests. 19.
This article does not necessarily reflect the views of the Bureau of National Affairs, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Steve Lucke is a partner and Head of the Healthcare Litigation Group at Dorsey & Whitney LLP. He regularly defends employers and trustees in healthcare and ERISA class action litigation.
Melinda Maher is a partner in the Benefits & Compensation practice group at Dorsey & Whitney, where she advises companies on the Affordable Care Act and other aspects of employer-sponsored health plans.
Katie Ervin Carlson is a Senior Counsel in the Labor and Employment Group at Dorsey & Whitney and advises clients on employment and human resources decisions.
Flossie Neale is an associate in the Labor and Employment Group at Dorsey & Whitney LLP.