Employers can resume covering telehealth for workers with health savings accounts before patients meet costly annual deductibles thanks to a provision in the omnibus spending bill approved by Congress.
Employer groups have called for lawmakers to extend and make permanent Covid-19 legislative provisions that expired at the end of 2021 that allowed them to provide coverage before annual deductibles are met for telehealth for workers with tax-advantaged health savings accounts.
Without the legislative changes, employers wouldn’t be able to provide telehealth coverage for high-deductible plans that are linked to health savings accounts, and employees would lose their eligibility to use health savings accounts. There are 30 million health savings accounts covering 63 million enrollees and family members, industry observers say.
The coverage provided by the omnibus legislation is temporary, however. It won’t cover the first quarter of 2022, leaving employers with uncertainty about how to handle claims for that period.
The $1.5 trillion spending bill for the remainder of fiscal 2022 passed by the House on Wednesday (H.R. 2471) and the Senate on Thursday also stipulates that health plans can keep their status as high-deductible health plans even if they don’t have any annual deductible for telehealth or remote-care services. In addition, it expands the eligibility of telehealth services for Medicare coverage during the 151 days after the end of a public health emergency.
The bill now goes to President
Health plans must meet tax law requirements for high-deductible health plans in order to qualify for health savings accounts, which can be used to set aside money on a tax-favored basis for health expenses. In 2022, deductibles of $1,400 for individuals and $2,800 for families must be met before medical claims can be covered in high-deductible health plans.
Question of IRS Enforcement
The provision only applies to the period from April 1 through Dec. 31, said Joel White, executive director of the Health Innovation Alliance, a coalition of patient groups, provider organizations, employers, and health insurance payers that support health information technology use.
As a result, Congress has “created some uncertainty about how benefit designs are structured,” White said.
The Internal Revenue Service shouldn’t enforce penalties on any plans that don’t comply in the first quarter, White said. For health plans that were set up previously, “we would argue they have discretionary enforcement authority, and therefore they shouldn’t make that plan non-qualified,” he said.
In a recent tax law conference, two IRS officials said the agency doesn’t have statutory authority to not enforce provisions regarding high-deductible plans eligible for health savings accounts.
The IRS didn’t respond to a request for comment.
A Plus for Companies, Workers
Research conducted by the Society for Human Resource Management (SHRM) found that 43% of organizations expanded telehealth services during the pandemic, the group said in a Jan. 31 letter asking that pre-deductible telehealth services be reinstated for high-deductible health plans and health savings accounts in the spending bill.
“This benefits employers and employees,” Emily Dickens, chief of staff, head of government affairs and corporate secretary of the SHRM, said of the provision in the omnibus.
Over the last few years, the ability of people who have relocated to remain connected to their physicians even when they are in different states is important, especially for mental health, Dickens said in an interview.
“Any way that you can contribute more readily to keeping your employees healthy is a plus for the employee and the employer,” she said.