First-Dollar Telehealth Provisions Expire at End of 2024 Plan Year
Employers that offer High Deductible Health Plans (HDHPs) that provide telehealth benefits before the participant meets their annual deductible may need to amend their plan prior to their plan’s year-end. The reason for this is that unless Congress provides an extension of relief that allowed first-dollar telehealth benefits without jeopardizing HSA contributions (either by the employer or employee), those provisions will expire on that last day of the plan year that began in 2024, thus disallowing HSA contributions in plan years beginning in 2025 and beyond in plans with that telehealth coverage. For example, a calendar year HDHP plan with first-dollar telehealth benefits will need to examine that specific benefit prior to December 31, 2024 when the exception expires.
Background
At the height of the pandemic, the CARES Act of 2020 permitted employers to optionally offer HDHPs with first-dollar telehealth benefits (not subject to what would normally likely be a service subject to the HDHP’s deductible) without causing the disallowance of employer or employee HSA contributions. In 2023, the Consolidated Appropriations Act extended those provisions but provided an end date of December 31, 2024 (or later for non-calendar year plans that began in 2024).
While there is legislation pending during the lame duck Congress to extend this relief, employers should prepare to amend their HDHP group health plan if such an extension does not occur. From our conversations in Washington DC, it is possible that if that extension doesn’t pass during lame duck, it may be reintroduced in the next session of Congress. Of course, passage of such an extension is not assured.
To Do Now
- Review any telehealth provisions in your group health plan prior to the plan year end.
- If the plan is amended for the plan year starting in 2025, don’t forget to amend the SPD (or provide a Summary of Material Modifications [SMM]).
