The Consolidated Appropriations Act of 2022, which was signed March 15, again permits first-dollar coverage for telehealth services without jeopardizing health savings account (HSA) eligibility, effective April 1, 2022, through December 31, 2022.
This means that for January, February, and March 2022, there is no telehealth exception allowing high-deductible health plans (HDHPs) to provide telehealth coverage prior to satisfaction of the applicable deductible.
Since the early days of the COVID-19 pandemic, telehealth has been an important way to obtain necessary medical care while maintaining recommended social distancing.
Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), HDHPs paired with HSAs could cover “telehealth and other remote care services” before the applicable deductible under the HDHP was met with respect to plan years beginning on or before December 31, 2021 (i.e., until December 31, 2021 for calendar year plans).
Normally, an HDHP may only pay certain categories of permissible coverage (i.e., preventive care), permitted insurance (e.g., liability/tort coverage, disease/illness insurance, or hospital indemnity insurance), or permitted coverage (e.g., dental, vision, long-term care, and disability coverage) before the statutory minimum HDHP deductible is satisfied, without causing HSA eligibility to be lost.
Another way telehealth services are provided at no cost under an HDHP is if the telehealth services do not constitute “significant benefits in the nature of medical care.” Given the increasing sophistication of telehealth services, however, it is difficult to conclude that benefits are appropriately limited.
Employers that expected the telehealth rule to be renewed retroactively to January 1, 2022, might consider whether corrective action can be taken to preserve HSA eligibility for January through March 2022, to the extent the employer continued to offer telehealth services at first-dollar coverage from January through March 2022 with such expectation. This could be done by billing participants for any telehealth visits prior to April 2022.
Telehealth offers many advantages for plan sponsors and participants. Plan sponsors must now consider if implementing this feature is worth the administrative lift for the nine months it is available. While the hope is that this relief becomes permanent beyond 2022, employers should not count on further extensions.