Spending Law Extends Pre-Deductible Telehealth Coverage Through 2022

On March 15, President Joe Biden signed legislation that restores to employers the option of providing pre-deductible coverage of telehealth services for people with high-deductible health plans (HDHPs), including those that are linked to health savings accounts (HSAs), for the months of April through December 2022.

The relief is included in the Consolidated Appropriations Act, 2022, a $1.5 billon omnibus spending measure that touches on numerous legislative matters.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March 2020, allowed HSA-eligible health plans to provide pre-deductible coverage for telehealth services, but only through 2021. Normal cost-sharing was still allowed for telehealth visits, such as through co-pays that the plan may require after the deductible is paid.

The vast majority of employer-sponsored HDHPs with HSAs elected to cover telehealth services on a pre-deductible basis—83 percent of fully insured plans and 81 percent of self-insured plans, according to a study from the trade group America's Health Insurance Plans.

A Gap Through March 2022

Brian Gilmore, lead benefits counsel at Newfront, an insurance and financial services firm in San Francisco, wrote that "the practical effect of the relief is that HDHPs may choose to waive the deductible for any telehealth services from April 2022-December 2022 without causing participants to lose HSA eligibility. The provision is optional—HDHPs are not required to waive the deductible that would otherwise apply to non-preventive telehealth services."

He added, "for employers with a calendar plan year, this leaves an unfortunate gap from January 2022 through March 2022 without any telehealth relief in place. Non-preventive telehealth services provided during this three-month period must still be subject to the HDHP deductible to avoid disrupting a participant's HSA eligibility. … Nonetheless, the short extension may still provide significant relief for the remainder of the year to HDHP participants now relying more heavily on telehealth services since the onset of the pandemic."

Tripp VanderWal, an attorney with law firm Miller Johnson in Grand Rapids, Mich., wrote that "for HDHPs with noncalendar year plans that take advantage of the extended relief, the HDHP will need to make a midyear change to subject non-COVID-19-related (or non-ACA-required preventive care) telemedicine visits on or after Jan. 1, 2023 to the [tax code's] minimum deductible requirements (unless the relief is again extended)."

He expects "that this extended relief will be welcome by most employer-sponsors of HDHPs that also offer a telemedicine benefit (but also frustrating that the extension of the relief is temporary)."

SHRM Sought Relief Extension

In January, the Society for Human Resource Management (SHRM) wrote to Democratic and Republican leaders of the U.S. House of Representatives and Senate urging them to restore pre-deductible coverage of telehealth services.

"Congress should reinstate pre-deductible telehealth services for high-deductible health plans and health savings accounts in the upcoming spending bill," urged the letter, signed by Emily M. Dickens, SHRM's chief of staff, head of government affairs and corporate secretary. The letter was sent to Speaker of the House Nancy Pelosi, D-Calif.; House Minority Leader Kevin McCarthy, R-Calif.; Senate Majority Leader Chuck Schumer, D-N.Y.; and Senate Minority Leader Mitch McConnell, R-Ky.

"Improved access to telehealth allows employees to access health care options at their convenience and expands the services and providers available to them," SHRM told congressional leaders. "First-dollar coverage benefits employees because it allows health insurance providers to cover telehealth services without a patient having to first pay their co-pay or deductible."

SHRM research reported that 43 percent of organizations expanded telehealth services throughout the COVID-19 pandemic, the letter noted.

Related SHRM Articles:

Navigating the Next Generation of Telehealth, SHRM Online, February 2022

Virtual Mental Health Care Presents Opportunities—and Potential Risks, SHRM Online, February 2022