Mercer and numerous stakeholder groups are urging Congress to address the impending expiration of pandemic-related relief allowing HSA-qualifying high deductible health plans (HDHPs) to cover telehealth and other remote care services on a pre-deductible basis. The relief, provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in March 2020, expires at the end of 2021 for calendar-year plans (later for noncalendar-year plans). While there are bipartisan bills pending in both chambers to extend the relief, the crammed year-end legislative calendar means action on the issue may not come until next year.
The current relief permits HSA-qualifying HDHPs to cover telehealth and other remote care services before individuals have satisfied their deductible, without jeopardizing their eligibility to make or receive HSA contributions. Similarly, an otherwise HSA-eligible individual may receive coverage for telehealth and other remote care services from a stand-alone vendor outside of the HDHP before satisfying the HDHP statutory minimum annual deductible, and remain eligible to make or receive HSA contributions. Unlike some other pandemic-related flexibilities provided to health plans, this relief is not tied to the ongoing public health emergency or national emergency, and is set to expire at the end of the plan year that began in 2021 (e.g., Dec. 31, 2021 for calendar-year plans), unless extended by Congress.
Mercer recently joined with more than 70 organizations in signing a letter to Congress to urge policymakers to the extend the telehealth relief enacted in the CARES Act. Bipartisan and widely supported House and Senate legislation addresses the issue. The Telehealth Expansion Act of 2021 (S 1704) and a substantively identical House bill (HR 5981) would permanently extend the CARES Act flexibility for HSA-qualifying HDHPs to offer, and an otherwise HSA-eligible individual to receive, pre-deductible coverage for telehealth and other remote care services without jeopardizing HSA-eligibility. The Primary and Virtual Care Affordability Act (HR 5541) would provide a 2-year extension of this CARES Act flexibility through December 31, 2023, and would expand HDHP pre-deductible coverage to “primary care services” through December 31, 2023.
The legislative push comes as the pandemic has transformed telehealth from an innovative option for delivering services into a vital lifeline to care for millions of patients. Mercer recently collaborated with the American Benefits Council and the Catalyst for Payment Reform on a white paper, Telemedicine in the Post-COVID-19 World, that is helping to raise awareness of how telemedicine has evolved and offering suggestions to policymakers on how to best leverage telemedicine to support employer-sponsored health program strategies and the broader health care system.
In addition to supporting an extension of pre-deductible coverage for telehealth services, employer groups are also asking Congress to make permanent the temporary telehealth policy provided by regulators during the ongoing public health emergency that allows telehealth and remote care services to be treated as an excepted benefit, and thus avoid having to comply with many ERISA and ACA group health plan mandates (e.g., first-dollar coverage of ACA-mandated preventive care). Under the proposed policy, employers can offer telehealth arrangements not just to non-benefits eligible employees (as is the case under current guidance) – such as part-time or seasonal workers – but also to those who opt out of the employer’s major medical plan.
The groups are also urging policymakers to remove state barriers to telehealth care and avoid imposing any mandates relating to telehealth that would increase costs and impede employers’ ability to pursue value-based care strategies.
Meanwhile, lobbying efforts to get an extension of pre-deductible telehealth coverage across the finish line this year are intensifying. Although a permanent extension of the provision faces long odds, there is bipartisan support for a temporary extension. However, the Build Back Better Act does not include any relief, and advancing such a provision separately before the end of the year appears unlikely. Thus, any legislative action to extend the flexibility may not come until 2022. Congress has often allowed legislation to lapse at year’s end and then reinstated it retroactively, usually within the first few months of the new year. Should this pre-deductible telehealth coverage relief expire, HSA-qualifying HDHPs that took advantage of this relief should begin charging participants for any pre-deductible telehealth services that are not HSA-compatible preventive care.
Employers with an interest in this provision should be aware of the potential expiration, consider the potential effects, and consider engaging with policymakers as appropriate.
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