Pre-deductible telehealth coverage

Pre-Deductible Telehealth Coverage Extension for HDHPs

On December 29, 2022, the Consolidated Appropriations Act, 2023 (CAA) was signed into law. This allows high deductible health plans (HDHPs) to offer benefits for telehealth and other remote services prior to meeting the deductible without jeopardizing health savings account (HSA) eligibility. Plan years between December 31, 2022, and January 1, 2025, are affected by this extension.

HSA-qualifying HDHP background

As per HSA contribution rules, telehealth programs that provide free or reduced-cost medical benefits before meeting the HDHP deductible are disqualifying coverage for purposes of HSA eligibility. Notably, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) previously allowed HDHPs to provide benefits for telehealth and remote services prior to meeting the plan deductible without threatening plan participants’ eligibility for HSA contributions. The CARES Act was applicable for plan years beginning January 1, 2022, and ending on December 31, 2022, for calendar plan years.

The Consolidated Appropriations Act, 2022 was enacted in March 2022, allowing HDHPs the option to waive the deductible for any telehealth services incurred between April 1, 2022, and December 31, 2022, without participants losing HSA eligibility. The CAA extends this coverage to plan years beginning after December 31, 2022, and before January 1, 2025.

Benefits of pre-deductible telehealth coverage

During the pandemic, the utilization of telehealth services drastically increased. SHRM research reported that around 43 percent of organizations expanded telehealth services during the pandemic, and 49 percent maintained similar existing benefits.

Allowing pre-deductible telehealth coverage improves health access by attracting employees previously discouraged by the associated out-of-pocket expenses. Additionally, remote care services can provide easier, quicker, and more extensive care options like mental health services. This expansion aids employers desiring to attract and retain talent by offering benefits that emphasize employee well-being.

If you have any questions about pre-deductible telehealth coverage, please contact your dedicated Creative Benefits, Inc. team member.