Recently, Congress passed a government funding bill, entitled the Consolidated Appropriations Act of 2022 (2022 CAA). Among other items, the 2022 CAA provides a temporary extension to the CARES Act telehealth relief, which expired on December 31, 2021. The extension permits, but does not require, high deductible health plans (HDHPs) to provide telehealth and remote services for no deductible (or a lower deductible than is required under the law) from April 2022 through December 2022 without jeopardizing plan participants’ health savings account (HSA) eligibility.

Employer Considerations/Action Items

Employers with Fully Insured HDHPs: Employers should reach out to their HDHP carrier to determine if their plans will adopt the telehealth relief from April 2022 through December 2022. It is likely that many fully insured HDHPs that adopted the CARES Act relief reverted to the standard deductible after the relief initially expired on December 31, 2021. If the CAA telehealth relief is again adopted (or adopted for the first time) for the rest of 2022, employers should communicate these changes to plan participants enrolled on the affected HDHP plans (if the carrier does not provide such a notice).

Employers with Self-Insured HDHPs: Employers should determine whether they want to amend their self-insured HDHPs to provide telehealth and other remote services with no (or a lower) deductible from April 2022 through December 2022. If an employer decides to adopt the temporary relief, they should consult with their stop-loss provider to ensure this change is amenable, work with their third-party administrator (TPA) to ensure they can implement these changes and notify affected plan participants accordingly.

Background

The CARES Act Telehealth Relief

In 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which permitted HDHPs to provide telehealth services (even those unrelated to the testing or treatment of COVID-19) without a deductible, or with a deductible below the minimum deductible otherwise required by law, until December 31, 2021. 

As a reminder, individuals must be covered by an HDHP and have no other disqualifying coverage (generally, any medical coverage that pays pre-deductible) to be HSA eligible (i.e., contribute to and receive contributions to an HSA). For a plan to be considered an HDHP, the plan must impose a statutory minimum deductible before the plan pays for covered services (with certain exceptions for preventative care).

The CARES telehealth relief provided that, if an HDHP provided free or low deductible telehealth services, covered individuals could receive those services without jeopardizing their HSA eligibility.

While carriers generally determined whether fully insured HDHPs adopted the telehealth relief, employers with self-insured plans (in consultation with their stop-loss provider and TPA) had the discretion to determine whether their self-insured HDHPs adopted the relief. Many HDHPs took advantage of the relief and provided telehealth services with no or a lower deductible; however, when the telehealth relief expired on December 31, 2021, many of these plans discontinued providing pre-deductible telehealth services.

The 2022 CAA Temporary Telehealth Relief Extension

Leading up to the expiration of the CARES Act telehealth relief, many employers urged Congress to extend the relief or pass a new bill that would make this relief permanent. Nonetheless, the CARES telehealth relief expired on December 31, 2021.

Congress revived the telehealth relief by passing a temporary extension under the 2022 CAA. Under the temporary 2022 CAA extension, HDHPs again have the option to provide telehealth and remote services for no deductible (or a lower deductible than is required under the law) only from April 2022 through December 2022 without jeopardizing plan participants’ HSA eligibility.

It is important to note that the telehealth relief is only effective from April through December 2022, regardless of an HDHP’s plan year. This means that calendar year HDHPs that adopt this relief will have a 3-month period from January through March 2022 where the standard deductible for telehealth and other remote services must apply to preserve plan participants’ HSA eligibility.

Additional Resources

Emerald Law — Emerald is a Senior Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music, and writing non-fiction.