Employer-sponsored health plans must navigate a crucial period as the federal telehealth coverage safe harbor for High-Deductible Health Plans (HDHPs) nears expiration. This provision, originating in the 2020 CARES Act and extended twice, enables HDHPs to provide pre-deductible (first-dollar) telehealth coverage without jeopardizing Health Savings Account (HSA) eligibility. Unless Congress acts, this relief will sunset on December 31, 2024, impacting plans starting January 1, 2025​.

Advocates are pushing for the Telehealth Expansion Act of 2023 (H.R. 1843) which would make first-dollar telehealth coverage a permanent feature for HDHPs. Without this legislation, HDHPs must revert to charging a Fair Market Value (FMV) fee for telehealth services to remain HSA-compatible, significantly raising employees’ out-of-pocket costs​.

Implications for Employers and Employees
Employers face several operational and compliance challenges as the 2025 deadline approaches. HDHPs are restricted in what they can cover pre-deductible, and offering first-dollar telehealth coverage without congressional intervention could disqualify a plan’s HSA eligibility. To prevent this, employers need to transition by either removing the telehealth benefit or establishing an FMV for services provided.

Plan sponsors offering telehealth as a standalone option must also adapt, as these services will become disqualifying coverage if extended beyond preventive care without cost-sharing mechanisms. Employees reliant on telehealth for accessible and affordable care may face increased barriers, particularly those managing chronic conditions or residing in underserved areas​.

Preparing for 2025 and Beyond
Employers should act now to safeguard employees’ HSA eligibility while awaiting potential congressional action. Steps include:

  1. Revising Plan Designs: Remove or modify telehealth coverage to include FMV charges.
  2. Communicating Changes: Clearly explain modifications to employees accustomed to first-dollar telehealth coverage.
  3. Tracking Payments: Ensure third-party telehealth vendors properly track FMV charges and adjust administrative processes​

While legislative uncertainty persists, advocates underscore the importance of making first-dollar telehealth coverage permanent to ensure HDHPs remain a viable and attractive option for employers while promoting employee well-being. Employers are encouraged to support the passage of H.R. 1843 and prepare contingencies as the expiration date nears​.