When the Coronavirus Aid, Relief and Economic Security (CARES) Act authorized employers to add telehealth services to high-deductible health plans (HDHPs), nearly every employer that works with Fidelity adopted the feature, says Robert Kennedy, a senior vice president at the company’s Workplace Consulting group.
Normally, if an HDHP waives the deductible for any services other than preventive care, it loses its status as a qualified HDHP and participants are not eligible to contribute or receive employer contributions to a health savings account (HSA). Section 3701 of the CARES Act created a temporary safe harbor allowing HDHPs to cover telehealth services and other remote care without cost to participants before their deductibles are met.
Before the CARES Act, the IRS had rarely discussed telehealth services, only informally declaring the services as disqualifying coverage in HDHPs, explains Kevin Robertson, a chief revenue officer at HSA Bank. However, closures and lessened availability of physician offices and clinics since COVID-19 came to the United States have led to an increase in demand for digital solutions to medical care.
As use of telehealth services increases, experts predict the services could lead to a long-lasting change for employers and employees. Telehealth has even been a slight beacon of hope for those unnerved by visiting a doctor, experts say. “There has been a fundamental shift in the way people are consuming medical services,” explains Shobin Uralil, co-founder and chief operating officer (COO) at Lively, an HSA provider. “What COVID-19 has done is raise this awareness that telemedicine is even an option.”
Plan sponsors that adopted the feature, or are considering doing so, should be aware of its provisions under the CARES Act. The current relief bill makes telehealth services available under HDHPs until December 31, 2021. According to Robertson, unless employers claim their telehealth feature as a post-deductible benefit, they will not be able to offer it while maintaining HSA-contribution eligibility. Kennedy says employers may be able to continue using telehealth services if they enact employee cost-sharing.
Uralil expects to see guidance expanding the ability to offer telehealth, given the demand from consumers. As society begins its recovery from the coronavirus crisis, he doubts the same amount of people will visit physician offices—for daily checkups and minor illness such as colds and coughs—as before. The rising use of mobile apps is likely to feed this interest in avoiding physical visits as well. “The wave and demand on telemedicine services that we’re seeing will continue to be extended, because employers and employees will see the benefits that it provides. Especially during these times when you can’t see a provider like you used to,” he says.
Begonya Klumb, head of HSA at Fidelity Investments, echoes a similar sentiment, saying the need for telehealth during this time could cause patients, providers and employers to feel more comfortable with virtual health care. HSA-eligible plans, therefore, shouldn’t lose HSA-qualification for adding telehealth services, she argues. Instead, Klumb says she wants policymakers to standardize the CARES Act provision allowing telehealth services. “The COVID situation has elevated digital alternatives to a variety of in-person processes, like telemedicine in health care, where care can be delivered safely and efficiently via a virtual environment,” she states.
Further, Klumb recommends policymakers expand allowable services under HSA-eligible plans, such as access to onsite medical clinics and direct primary care (DCP), which allows patients to make periodic payments to their physician or practice for a defined set of primary cares services. Klumb also advocates for decoupling HSAs from HDHPs, as only employers who provide these plans may offer HSAs. Several legislative proposals, including the recent Pandemic Health Care Access Act, have already introduced the idea of extending HSA eligibility to health plans beyond HDHPs, she adds.
Uralil expects the upcoming election cycle to steer direction for telehealth services. “We still have another 19 months to go before the temporary rule is due to sunset. In between that time frame, it will be compelling to see what Congress will look like,” he says. “It’s an opportunity for Washington to rally around common-sense laws to put the consumers first.”
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