On December 23, 2022, the Consolidated Appropriations Act, 2023 (CAA-23) was passed by Congress and signed into law by President Biden. Critically, CAA-23 includes a provision extending temporary relief for high-deductible health plans (HDHPs) that provide pre-deductible coverage of telehealth or other remote care services while maintaining the participants’ health saving account (HSA) eligibility. This eleventh-hour lawmaking by the Federal government should be welcome news to HDHP plan sponsors and participants alike, who were no doubt experiencing angst as the prior relief was set to expire on December 31, 2022.
Under this extended relief, provision of no-cost or reduced-cost telehealth services before the statutory minimum deductible has been satisfied is not considered to be disqualifying coverage for HDHPs with plan years beginning after December 31, 2022, and before January 1, 2025. Thus, for HDHPs with calendar plan years, the relief will expire on December 31, 2024, and for fiscal year plans, the relief will expire as of the first full plan year ending in 2025.
Background
The Consolidated Appropriations Act, 2022 (CAA-22), which was signed into law on March 15, 2022, extended the ability of HDHPs to provide pre-deductible coverage for telehealth services for “months beginning after March 31, 2022, and before January 1, 2023.” This provision is entirely optional and was intended to promote remote-access to care during the COVID-19 pandemic. As this provision was set to expire on December 31, 2022, the general HSA contribution rules would have strictly limited availability of first-dollar or reduced-cost telehealth services before the minimum deductible was satisfied (absent another exception, such as for preventive care services). In the absence of the extended relief of CAA-23, such coverage would have amounted to disqualifying coverage for an otherwise HSA-eligible individual, preventing him or her from making tax-free contributions during the associated period.
Please reach out to your MJ representative if you have any questions or concerns about whether your group health plan is in compliance with these rules.
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