HDHPs Can Continue Covering Telehealth with No Cost-Sharing under New Law

An expired provision that authorized high-deductible health plans to reimburse for telehealth and other remote health care services before the deductible has been met, has been revived.

The provision was extended from April 1 through Dec. 31 after President Biden signed the Consolidated Appropriations Act of 2022.

Due to the COVID-19 pandemic and ensuing emergency legislation, HDHPs had been required to cover telehealth services with no out-of-pocket costs for the health plan enrollee, but those rules expired at the end of 2021.

The extension was included in the budget bill as telemedicine has grown in popularity because it’s convenient particularly for people who have to travel far to their appointments. It also expands provider choice and access, proponents say.

HDHPs are usually only required to cover preventative care and 10 essential services mandated by the Affordable Care Act with no out-of-pocket costs for the policyholder. All other medical care must be paid for by the enrollees until they meet their deductible.

If a health plan were to violate this rule, it would result in the enrollee being barred from contributing to their attached health savings account (HSA).

The HDHP exemption was initially codified by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a sweeping relief package to keep the economy afloat at the start of the pandemic.

The technical language of the act stated that HDHPs remain qualified for the purposes of HSA contributions if they cover telehealth or remote medical services before the enrollee has met their deductible. The exemption expired on Dec. 31, 2021.

That means there is a gap of three months through March 31 when coverage for telehealth before meeting their deductible would result in an HDHP enrollee being ineligible from contributing to their HSA.

This could result in confusion among enrollees, so employers need to be prepared for this.

What employers should do

As a result of this change, you should review your plan documents and summary plan descriptions to see if they have been updated to reflect this new HDHP exemption starting April 1.  If not, contact your insurer to get updated documents.

You should also inform your staff about the changes via usual company communications, memos and as an agenda item at your next company meeting.

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