- On December 3, 2024
During the COVID-19 pandemic, Congress created a temporary safe harbor to allow qualified high-deductible health plans (HDHPs), which can be paired with health savings accounts (HSAs), to cover telemedicine services before applying the plan’s deductible. This safe harbor allowed HDHP plan recipients to access telehealth visits on a first-dollar basis without jeopardizing their HSA eligibility. However, this safe harbor is set to expire on December 31, 2024, leading to questions about what will happen to telehealth coverage under HDHP plans in the future.
Will the Safe Harbor Be Extended for A Third Time?
Possibly. However, Congress is not guaranteed to pass extension legislation before the December 31, 2024 deadline.
What Is the Safest Course of Action for Plan Sponsors Offering HDHP Coverage Paired With HSAs?
Employers sponsoring calendar-year plans should assume that the safe harbor will not be in effect in 2025. This means that QHDHP summaries of benefits, summaries of benefits and coverage, and other plan documents should reflect that all telehealth services will be subject to the deductible just like all other services except those classified as preventive care. Telehealth providers, including standalone providers and those offering telemedicine services through traditional medical practices, will need to bill the plan at a fair market rate for services rendered. When processing telehealth claims, the plan should not pay any that are not coded as preventive care until after the satisfaction of the deductible. Once the deductible is met, plans may elect to cover telehealth on a first-dollar basis or impose some other type of cost-sharing.
For non-calendar year plans, the safe harbor will remain in effect until the end of the 2025 plan year. That means for a plan that renews on April 1, 2025, an HDHP can cover telehealth before applying the deductible until March 31, 2025, without jeopardizing the HSAs of anyone on the plan. However, when non-calendar year plans renew in 2025, they should prepare to treat telehealth services the same as any other medical care service other than preventive care.
Can Congress Allow the Safe Harbor to Expire and Then Enact New Telehealth HDHP Protections at a Late Date?
Yes. Congress did exactly that for several months in 2022. They may do the same thing and let the old law expire but enact new protection for HDHPs and HSAs at some point during 2025.
What Should Employers Do to Address This Situation?
Employers should:
- Ensure that all 2025 HDHP plan offerings reflect the expiration of the telehealth safe harbor.
- Check all HDHP benefit handouts, summaries of benefits and coverage documents, summary plan descriptions, certificates of coverage, and other plan documents to ensure each includes language specifying telehealth visits will be subject to the deductible in 2025.
- Verify with all carriers, third-party claims administrators, HSA account vendors, and standalone telemedicine providers that they are aware of the coming safe-harbor expiration.