New Law Temporarily Permits Pre-Deductible Telehealth Coverage … Again
March 24, 2022
A spending bill signed into law on March 15, 2022, reinstates the ability of high-deductible health plans (HDHPs) to provide benefits for telehealth or other remote-care services before plan deductibles have been met without jeopardizing health savings account (HSA) eligibility. This extension applies to any telehealth services from April 2022 through the end of the year.
HSA contribution rules strictly limit the types of health plan coverage that eligible individuals may have. As a general rule, telehealth programs that provide free or reduced-cost medical benefits before the HDHP deductible is satisfied are disqualifying coverage for purposes of HSA eligibility.
However, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) temporarily allowed HDHPs to provide benefits for telehealth or other remote care services before plan deductibles had been met, without jeopardizing plan participants’ eligibility for HSA contributions. This relief was only applicable to plan years beginning before January 1, 2022, and therefore, has expired for most plans.
Impact of the Extension
Under the Consolidated Appropriations Act, 2022, HDHPs may choose to waive the deductible for any telehealth services from April 1, 2022, through December 31, 2022, without causing participants to lose HSA eligibility. This provision is optional; HDHPs can continue to choose to apply any telehealth services toward the deductible.
Depending on the plan year of the health plan, this may result in a gap between the CARES Act relief and the new relief effective April 1, 2022. For example, the CARES Act relief expired for calendar year plans on December 31, 2021, and the new relief isn’t effective until April 1, 2022. Therefore, under a calendar year plan, any telehealth services provided between January 1, 2022, and March 31, 2022, must still be counted toward the HDHP deductible to avoid jeopardizing participants’ eligibility for HSA contributions.
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The above information does not constitute advice. Always contact your employee benefits broker or trusted advisor for insurance-related questions.