By Benjamin J.Conley and Adam R. Young

Seyfarth Synopsis: The OSHA COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS) will require unvaccinated employees to submit weekly COVID-19 testing results by February 9, 2022. New guidance from the Biden Administration could require employer health plans to reimburse the cost of at-home COVID testing in certain circumstances, creating confusion for employers on how the two mandates interact.

The ETS is current law, but the testing requirements may be stayed or blocked by current litigation in the Supreme Court. Assuming the ETS stays current law and is not blocked by the Court, the ETS deliberately permitted employers to require employees handle the cost of testing. The stated reason for that choice was to incentivize vaccination over testing. Many employers intend to comply with the ETS and weekly testing requirements by having employees do off-site testing: in-home antigen testing, free off-site testing from government agencies (while supplies last), or testing at paid third party providers.

Employers are now struggling to reconcile the payment terms of the ETS (allowing employers to make employees pay for the off-site testing), state laws requiring payment for medical examination, and the January 10, 2022 DOL, HHS and IRS announcement requiring employer health plans to pay for the cost of at-home testing (the “Health Plan Mandate”). The Health Plan Mandate requires health plans to pay for up to eight at-home antigen tests per month. (This builds on an existing mandate under the CARES Act/FFCRA that required health plans to cover testing by third-party healthcare providers), which has been in effect since March of 2020. .

For employers who plan to address the ETS’s weekly surveillance test requirement for unvaccinated employees with offsite testing, the Health Plan Mandate has a less direct impact on employers who sponsor fully-insured plans. In those plans, the employer is only responsible for the plan premium and the insurance carrier must pay the cost for any at-home tests. While the availability of free at-home tests may (a) make employees less likely to get vaccinated, and (b) ultimately drive up insurance premiums, those impacts are less direct and immediate.

For self-funded employers, the Health Plan Mandate has a more immediate impact in that employers are responsible for paying any claims for benefits (including the cost of reimbursing employees for at-home tests). Even so, we believe there are several mitigating factors (and some additional steps employers can take to further blunt the impact). Specifically:

  1. Health Plan Mandate Only Extends to Health Plan Participants. The Health Plan Mandate is a not an employer mandate. So, the mandate only extends to persons enrolled in the employer’s health plan. While this may still include a sizeable portion of the employer’s workforce, it would exclude persons who are covered under a spouse’s plan, for example. (Although the counter-argument here is that spouses enrolled in your employer group plan are eligible for free at-home tests, which may offset those employees not enrolled in your plan.)
  2. Plans May Require Attestation that Test is Not for Employment Purposes. The Health Plan Mandate permits plans to seek an attestation from participants that the test is intended for personal use and not for employment purposes. This provides some modicum of a deterrent against employees relying on the free at-home tests to satisfy their ETS weekly testing obligation, although it may be somewhat illusory. Specifically, it would be very difficult for a plan to determine whether an employee is in violation of the attestation. And even if the plan could make such a determination (e.g., because the employee admits openly that they are using the free, plan-paid tests for employment purposes), the attestation would be covered under HIPAA privacy protections. This means the plan would be prohibited from sharing the data with the employer, and the employer would be unable to take any adverse employment actions against the employee. The employee could face adverse consequences under the plan, however, up to and including termination of coverage.
  3. Individualized Clinical Assessment Still Necessary for Other Forms of Testing. The Health Plan Mandate makes clear that outside of at-home tests, health plans can still limit coverage for other forms of tests to situations where the participant has received an individualized clinical assessment by a health care provider that a test is appropriate. Employers may require third-party-administered antigen or molecular (e.g. PCR) tests to satisfy the weekly requirement. While this restriction would address the issue of employees relying on at-home tests to satisfy the weekly testing mandate, it is feasible that employees would be able to obtain a doctor’s order for other forms of testing, and the health plan would still be obligated to cover those costs under the pre-existing CARES Act/FFCRA requirements. Given the ubiquity of the Omicron variant at present, most doctors can plausibly order a test on the basis of individuals being in a high-transmission area.
  4. Employers Could Consider Implementing a Vaccine Surcharge. Before the announcement of the ETS, many employers were considering implementing a health plan premium surcharge on unvaccinated workers (and while interest waned in the wake of the ETS announcement, many moved forward with their plans). The new Health Plan Mandate may cause a resurgence of interest though, given the risk that unvaccinated workers will the health plan (properly or otherwise) to offset the cost of their weekly testing obligation. For more information on the legal parameters surrounding such a vaccination surcharge, check out our legal alerts here and here.

We will continue to monitor developments in this space, including any updates based on the Supreme Court’s ruling on the ETS.