Two-Year Extension of Telehealth Flexibility for HSA Eligibility

On December 23, 2022, Congress passed its 2023 omnibus legislative package, Consolidated Appropriations Act, 2023 (CAA 2023), to continue to fund the federal government.

On December 23, 2022, Congress passed its 2023 omnibus legislative package, Consolidated Appropriations Act, 2023 (CAA 2023), to continue to fund the federal government. Included in the omnibus is a two-year extension of a requirement initially introduced in the CARES Act, and later extended through the CAA-21, that allowed health savings accounts (HSA)-qualified high deductible health plans (HDHPs) to cover telehealth services before participants reach their deductible. This extension means employers with HDHPs can waive participant deductibles for any telehealth services without impacting those participants' HSA eligibility. This provision, previously set to expire on December 31, 2022, has now been extended to December 31, 2024. Non-calendar year HDHP plans may allow pre-deductible telehealth through the end of any plan year which begins before January 1, 2025. For HDHPs on a non-calendar plan year, participants would be ineligible for HSA contributions in the 2023 months of the 2022-2023 plan year. Participants would only be eligible for HSA contributions following the plan year renewal in 2023. Assuming they keep the same coverage, they would remain eligible until the end of the 2024-2025 plan year.

Although this is a COVID-era provision, participants can use telehealth for any reason. This new relief is not mandatory for health plans. Self-insured employers should work with their TPA and stop-loss provider if they wish to implement this provision. Fully insured plans will want to discuss with their insurance carrier.

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