On December 23, 2022, the year-end omnibus bill, Consolidated Appropriations Act, 2023 (CAA 2023), was approved by the US Congress. This bill includes all (12) fiscal year 2023 appropriations bills and other provisions, specifically in health policy. One of the key health provisions included in the legislation is an additional 2-year extension of the temporary safe harbor allowing for first-dollar coverage of telehealth services for High Deductible Health Plans (HDHP) that was initially adopted in response to the COVID-19 pandemic in 2020.
Background
When the CARES Act was enacted, it contained several provisions that affected healthcare benefits, including the expansion of telehealth services. It allowed HDHPs to cover telemedicine services with no cost-sharing responsibilities to plan participants before the deductible was satisfied. The expansion ensured that HDHPs would not lose HSA eligibility for offering this expansion to plan participants. Many MedCost clients took advantage of this and amended their plans to cover telehealth services at a first-dollar benefit level. The initial expansion of telehealth services only applied to plan years beginning on or before December 31, 2021.
In late 2021, there were several proposals to extend the safe harbor, but Congress was unable to pass the omnibus spending bill prior to the expansion’s expiration date in December 2021. However, in March 2022, when Congress finally passed the spending bill, the telehealth expansion was extended again during the months beginning after March 31, 2022 and before January 1, 2023. This expansion did not apply to the first (3) months of 2022, requiring some plans to still apply the minimum deductible to telehealth and other remote care services during those months. This extension permitted the safe harbor until December 31, 2022; this time, regardless of when the plan began.
HDHP Safe Harbor Extended to 2023/2024 Plan Years
Now, in 2023, the safe harbor for telehealth services for HDHPs has been extended for plan years beginning after December 31, 2022, and on or before December 31, 2024. It is very important to note as with the earlier safe harbor, this is not required but is an option for plan sponsors.
To take advantage of the HDHP safe harbor extension, a plan amendment is needed. Please contact your Account Manager for assistance.