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:
- Revising Plan Designs: Remove or modify telehealth coverage to include FMV charges.
- Communicating Changes: Clearly explain modifications to employees accustomed to first-dollar telehealth coverage.
- 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.