The Consolidated Appropriations Act, 2023 (CAA23) was signed into law on December 23, 2022. One of the health provisions contained in the law was the long-anticipated relief on telehealth coverage offered through High Deductible Health Plans (HDHPs) that combine with Health Savings Accounts (HSAs).
Typically, HSA-qualified HDHPs cannot pay for covered services, except for specified preventive care, until the individual satisfies the plan’s deductible. The CARES Act that passed into law in 2020 permitted people who have coverage through a HDHP to receive telehealth care at no cost, regardless of the plan’s annual deductible, without impacting their eligibility to contribute to an HSA. This provision was set to expire on December 31, 2022. Now, the CAA23 creates a safe harbor for first-dollar telehealth coverage offered through an HDHP for plan years beginning after December 31, 2022 through December 31, 2024.
Plan sponsors can only begin taking advantage of this new relief once their plan renews after December 31, 2022. This means that groups with plans renewing on January 1, 2023, can offer the relief immediately, whereas groups with plans that renew in a different month of the year will need to wait until the start of their 2023 plan year to begin offering it.
The way the legislation is written, there is a small gap for non-calendar year plans. The new extension applies for plan years beginning after December 31, 2022. For example, an HDHP with a plan year beginning June 1 could not offer telehealth before the deductible for the period from January 1, 2023 through the end of May 2023. Any HDHP that does not have a calendar plan year would have a similar gap between January 1, 2023 and its plan year start.
The telehealth relief is optional for plan sponsors. Group plan sponsors are not required to offer their participants access to telehealth coverage at all, nor do they have to offer it on a first-dollar basis for any type of plan offering, including HDHPs. If a group decides to adopt this relief, they also need to make sure their plan documents are amended accordingly.