HDHPs Can Waive Deductible for Telehealth for Remainder of Year
January brought breaking news that the U.S. Supreme Court (the Court) would stop OSHA from enforcing its employee COVID-19 test or vaccinate emergency temporary standard (ETS) for employers with 100 or more employees. Although the decision doesn’t end the OSHA ETS permanently, it means that the ETS is unlikely to be upheld in its current form. The Court left in place a COVID-19 vaccine employer mandate for Medicare and Medicaid-certified entities. The decision does not end the debate, but it does mean employers will continue to be subject to varying standards at the state level with no uniform federal standard.
In other news, health plans were notified that they must cover COVID-19 over-the-counter tests at no cost to enrollees, with only days to put a plan in place to comply with the rule. This left employers and pharmacy benefit administrators scrambling to analyze the guidance and be ready within days to provide the expanded coverage. The Department of Labor also reported to Congress that their enforcement efforts in 2021 for mental health parity showed that health plans are not ready to provide the required mental health parity analysis for nonquantitative treatment limitations. Finally, there is some guidance on the broker compensation disclosure rule, which informs entities subject to the rule to look to related guidance that applies to retirement plans. January brings home the reality of the continued need to stay up to date on regulatory efforts directed at group health plans.
The Consolidated Appropriations Act, 2022 (CAA), recently signed into law to avoid a government shutdown, includes a provision that will reinstate COVID-related telehealth coverage relief for high-deductible health plans (HDHPs) that choose to permit it. The CAA allows HDHP plan sponsors to allow participants to access non-preventive telehealth services before satisfying a plan’s deductible – but only from April 1, 2022, through December 31, 2022.
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) allowed first-dollar telehealth coverage under HDHPs while keeping participants eligible to contribute to a health savings account (HSA). This CARES Act relief ended for plan years beginning on or after January 1, 2022.
The CAA provision is not retroactive; so non-preventive telehealth services would remain subject to an HDHP’s deductible from January 1, 2022, through March 31, 2022, even if a plan sponsor elects to follow the CAA change for the balance of 2022. Further, non-calendar year plans that choose to adopt the change must remember that relief will not apply for the entire plan year; they will need to make a mid-year change to subject non-preventive telehealth services to the HDHP deductible for any months starting with January 2023.
Many plan sponsors and participants will welcome news of this temporary relief. However, plan sponsors who wish to allow this change will need to modify their plan documents and Summary Plan Description (SPDs), communicate the relief to employees – both now and prior to year’s end – and consider whether and how insurance carriers or third-party administrators will or can assist in allowing a plan to adopt the change. Employers will need to weigh the costs and administrative burdens associated with adopting the relief against the limited nature of the relief when deciding whether to incorporate it into their plans.
We will continue to monitor developments relating to this issue including any guidance regarding potential retroactive application to periods prior to April 1, 2022, and will provide updates as needed.