Comp and Benefits Brief

The Consolidated Appropriations Act of 2022 (“2022 CAA”), which was recently signed into law, reinstates the exception that allows high deductible health plans (“HDHPs”) to waive all or a portion of participant cost-sharing for telehealth services (medical or mental health) without jeopardizing the participant’s or his or her family members’ eligibility to contribute to their own health savings account (“HSA”).This is similar to, but a slightly expanded version of, the prior first-dollar telehealth exception that was available under COVID relief legislation but lapsed on December 31, 2021 (for calendar year plans).

As background, an HDHP may only pay for certain permissible categories of coverage (e.g., preventive care), premiums for permissible insurance (e.g., disease or hospital indemnity insurance), or premiums for permitted coverage (e.g., dental or vision coverage) before the statutory minimum HDHP deductible has been satisfied. If the HDHP fails to satisfy this rule during any calendar month, the covered participant and his or her covered family members become ineligible to contribute to an HSA for that calendar month.

This limited waiver of participant cost-sharing on telehealth coverage is optional for sponsors of HDHPs. If this waiver may be of interest to you, please read further for more considerations (the below apply to calendar year plans - if your plan is not a calendar year plan, please contact us to discuss how you are impacted):

  1. You may only waive participant cost-sharing on telehealth services received during the period from April 1, 2022 – December 31, 2022.
  2. No cost-sharing waiver is permitted for telehealth services received during the period from January 1, 2022 – March 31, 2022 (the “gap period”).
  3. If your HDHP plan allowed first-dollar coverage for telehealth during the gap period, you should consult with your legal counsel as to any corrective steps you may need to take.
  4. “Telehealth” refers to both telehealth services and certain other qualifying remote care services.
  5. Plan sponsors should make sure that their third-party administrator (if self-insured) or insurer (if fully-insured) can accommodate this change.
  6. Plan sponsors must amend their plan to provide this limited relief and notify participants.

Additional changes were made to the telehealth rules that apply to Medicare coverage, but are outside the scope of this Alert.