If you sponsor a high deductible health plan (“HDHP”) and have been tracking telehealth relief, your head may be spinning and rightfully so! There have been various laws and guidance impacting HDHPs and telehealth since 2020 and most recently, new legislation extended relief for 2023 and 2024 plan years. The relief allows, but does not require, HDHPs to provide telehealth and other remote care services on a pre-deductible basis without making participants health savings account (“HSA”) ineligible.
Below is a brief summary of laws impacting HDHPs and telehealth since 2020:
- Pre-COVID-19 Long-standing Internal Revenue Service (“IRS”) Telehealth Rule – Under Internal Revenue Code (“Code”) Section 223, if an HDHP provides non-preventive care, including telehealth and other remote care services to a participant before the minimum deductible is satisfied, the plan will fail to be an HDHP, disqualifying individuals covered under the HDHP from being eligible to make or receive tax-favored HSA contributions.
- Families First Coronavirus Response Act (“FFCRA”) Section 6001 – In response to COVID-19, Congress passed legislation that requires group health plans to cover (without cost-sharing, prior authorization, or medical management requirements) certain COVID-19 diagnostic tests and related services provided during telehealth visits (as well as in-person, urgent care, and emergency room visits) until the end of the COVID-19 Public Health Emergency.
- IRS Notice 2020-15 – IRS made an exception allowing HDHPs to cover COVID-19 testing and treatment on a pre-deductible basis but did not provide any relief for waiving HDHP deductibles for telehealth visits that are not for COVID-19 testing or treatment.
- Coronavirus Aid, Recovery and Economic Security Act (the “CARES Act”) Section 3701 and IRS Notice 2020-29 – Congress amended the Code so that an HDHP may provide telehealth and other remote care services on a pre-deductible basis, without impacting an individual’s ability to contribute to an HSA, for services provided on or after January 1, 2020 and plan years beginning on or before December 31, 2021.
- Consolidated Appropriations Act, 2022 (“2022 CAA”) Section 307– Congress extended HDHP telehealth relief under the CARES Act from April 1, 2022 – December 31, 2022, notably leaving a three-month gap in relief from January 1, 2022 – March 31, 2022.
- Consolidated Appropriations Act, 2023 (“2023 CAA”) Section 4151- Congress extended HDHP telehealth relief under 2022 CAA through plan years beginning before January 1, 2025. For calendar year plans, this extension means that the plan may offer the telehealth relief for the 2023 and 2024 plan years. However, for non-calendar plan years, it may leave a gap in coverage.
Below are some additional issues employers may want to consider:
- The 2023 CAA telehealth relief is optional. Employers may, but do not have to, provide telehealth and other remote care services on a pre-deductible basis. However, employers that choose not to provide telehealth on a pre-deductible basis still must comply with FFCRA which, as noted above, requires group health plans to cover (without cost-sharing, prior authorization, or medical management requirements) certain COVID-19 diagnostic tests and related services provided during telehealth visits until the end of the Public Health Emergency.
- The 2023 CAA telehealth relief is temporary. Although various organizations will lobby to make this relief permanent, it is currently set to expire December 31, 2024 for calendar year plans.
- Regardless of whether an HDHP takes advantage of the 2023 CAA telehealth relief, the plan sponsor should clearly communicate whether it provides telehealth and other remote care services on a pre-deductible basis. This may require a plan amendment, revised SPD, or summary of material modifications and is particularly important for non-calendar year plans that cannot provide telehealth and other remote care services on a pre-deductible basis for any 2022 plan year months that fall in 2023.
For more information about the original relief, see our SW Benefits Updates, “The Cares Act – What Are the Health and Welfare Plan Issues to Consider?”, “COVID-19 and Cafeteria Plans – To Amend or Not to Amend?” and “HDHP Telehealth Relief Extended for Remainder of 2022, but Mind the 3-Month Gap in Relief.”