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Volume XIII, Number 39

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Another Extension of Telehealth Relief for HDHP/HSA Plans

The Consolidated Appropriations Act of 2023 (2023 CAA) further extends the HSA safe harbor allowing high deductible health plans (HDHPs) to offer first dollar coverage of telehealth services without ruining HDHP members’ ability to make or receive pre-tax contributions into their health savings accounts (HSAs). In other words, HDHP plans can continue to waive the deductible for any telehealth services without causing members to lose HSA eligibility. This relief was set to expire on December 31, 2022, in which case as of January 1, 2023 health plans involving telehealth services in conjunction with a qualifying HDHP would have had to start charging members for telehealth services until their deductible was met in order for members to remain eligible to make or receive HSA contributions (unless a different HSA exception applied). The 2023 CAA generally extends this exception for another two years.

Our articles here and here summarize the creation of this HDHP/HSA telehealth exception in response to the pandemic, as well as its first extension.

Specifically, 2023 CAA’s extension applies to plan years beginning after December 31, 2022 and before January 1, 2025. For calendar year plans, this means that the extension applies for the 2023 and 2024 calendar years. While many industry stakeholders were hoping for a permanent exception for telehealth, this is still welcomed news and possibly signals a willingness to eventually make it permanent.  

Employer plan sponsors currently providing first dollar telehealth coverage under their HDHP may continue to do so through December 31, 2024 (for calendar year plans), and should reach out to their health insurance carrier or third party administrator to ensure it is implemented. Employers who do not currently provide first dollar telehealth coverage under their HDHP may wish to consider this as a benefit for their employees given this two year extension. 

Third party administrators, health insurance companies, and other plan service providers should communicate this relief extension to their employer clients and operationalize first dollar telehealth coverage for clients who choose to adopt it. 

This is also welcomed news for telehealth companies and other point solution companies who offer remote care services to employees of employer clients, as such companies can offer an employer-paid, first dollar option without negatively impacting the member’s HSA qualification. This typically has the result of increasing utilization and overall member engagement, generally viewed as a positive by employers sponsoring telehealth programs and the telehealth companies themselves.  

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© 2023 Foley & Lardner LLPNational Law Review, Volume XII, Number 363
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About this Author

Nick J. Welle, Foley, Employment Benefits Lawyer, qualified retirement plans attorney
Senior Counsel

Nick Welle is an associate and business lawyer with Foley & Lardner LLP. His practice is focused on health and welfare plans. He also assists clients with qualified retirement plans, including defined benefit and defined contribution plans.

Mr. Welle advises employers, insurers, and brokers concerning the federal laws governing health and welfare plans, including the Affordable Care Act (ACA), Employee Retirement Income Security Act (ERISA), Internal Revenue Code (Code), Health Information Portability and Accountability Act (HIPAA), Mental...

414-319-7185
Thomas B. Ferrante, Foley, Healthcare Regulatory Lawyer, Transactional Matters Attorney
Partner

Thomas (T.J.) Ferrante is a Partner and health care lawyer with Foley & Lardner LLP, where he focuses his practice on a wide range of transactional and related regulatory issues for health industry clients, including for-profit and not-for-profit hospitals and health systems, multi-specialty physician practice groups, and long-term care providers. Mr. Ferrante has experience with a variety of transactions, including mergers and acquisitions, joint ventures, strategic affiliations, obtaining and maintaining tax-exemption, employment contracts and leases, and other...

813-225-4148
Hannah Demsien Business Attorney Foley Lardner
Associate

Hannah Demsien is an associate with Foley & Lardner LLP and a member of the firm’s Business Law Practice.

Hannah focuses her practice primarily on, employee benefits, executive compensation, and insurance.

Before attending law school, Hannah worked in Chicago as a legal assistant for an immigration law firm, helping corporate clients sponsor foreign workers for permanent residency. As a law student, Hannah served as a legal intern for several government offices in Wisconsin, focusing on insurance and employee benefits. Additionally, she was a summer associate in the firm’...

414-297-5165
Cullen Werwie Labor and Employment Attorney Madison
Associate

Cullen Werwie is an associate attorney and a member of the Employee Benefits and Executive Compensation Practice Group in the firm’s Madison office. 

Prior to law school,...

608-258-4322
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