HDHP/HSA First Dollar Coverage for Extended Telehealth | Newsletters | Legal Update: Overview of Employee Benefits

The Consolidated Appropriations Act of 2022, signed into law on March 15, 2022, extended the relief first made available at the start of the pandemic, which allowed first dollar coverage for telehealth services under a high-deductible health plan (HDHP) without ruining health savings account (HSA) eligibility. The original relief expired on December 31, 2021. Under the new law, the relief is reinstated from April 1, 2022 to December 31, 2022. See our original article on this relief here and our article describing other provisions of the Consolidated Appropriations Act, 2022 applicable to telehealth here.

Note that this relief does not apply retroactively to January 1, 2022. For calendar year plans, this results in a gap in the relief. We understand that some plan sponsors continued to allow first dollar coverage for telehealth on the assumption that the relief would apply from January 1 to March 31. These plan sponsors will need to consider whether to retroactively adjust claims to match this relief gap or run the risk of non-compliance. Some in the industry believe that the Internal Revenue Service (IRS) will not take enforcement action against HDHPs that fail to close the gap; however, the IRS has stated in the past (and recently, in informal comments) that it does not have the legal authority not to enforce these legal requirements. Additionally, this will ultimately be a problem for employees, as individual taxpayers, as they will be the ones to claim eligibility for their HSA on their tax returns.

For fully insured HDHPs, plan sponsors should contact their insurance company to determine if the company will apply this relief. For self-funded HDHPs, plan sponsors wishing to authorize this relief should alert their TPA and stop-loss insurer. As usual, plan documentation needs to be reviewed and participants’ communications need to be sent.

Many are calling on Congress to make the relief permanent to avoid the “telehealth cliff.” The various telehealth reliefs extended during the pandemic have had a massive impact on expanding patient access to care. Join Foley attorneys and other telehealth experts at the American Telemedicine Association’s ATA 2022 Annual Conference and Expo May 1-3. Learn more about the topics Foley’s attorneys will address at the conference, including the push for telehealth as a long-term solution to modernizing America’s healthcare system here.

As part of Foley’s ongoing commitment to providing legal insights to our clients and colleagues, our Employee Benefits and Executive Compensation Group publishes a monthly newsletter we call “Employee Benefits Insights”, in which we provide you updates on the latest and most pressing employee issues. benefits and other related matters. Click here or click the button on the left to subscribe.

Harry L. Blanchard