In 2020, the federal government enacted temporary relief excluding telemedicine as disqualifying other health coverage (“disqualifying coverage”) when provided in conjunction with a high deductible health plan (HDHP). This relief broadly preserved participant eligibility for health savings account (HSA) contributions and allowed employers to offer telemedicine with a $0 copayment in conjunction with HDHPs.
This temporary relief has been extended twice, and the most recent extension occurred as part of the Consolidated Appropriations Act, 2023 (CAA 2023). The CAA 2023 extension applies to HDHP plan years beginning after December 31, 2022, and before January 1, 2025. Absent further relief, most telemedicine coverage will again become disqualifying coverage for HSA contribution eligibility purposes for HDHP plan years beginning on or after January 1, 2025.
This Alert summarizes why telemedicine is generally disqualifying coverage, the expiring telemedicine relief under the CAA 2023, prospects for further relief, and employer considerations to preserve employee HSA contribution eligibility for plan years beginning on or after January 1, 2025. This Alert is relevant for all employers offering telemedicine benefits in conjunction with an HDHP.
