Last week Congress passed the Consolidated Appropriations Act, 2023 (CAA 2023) which included a two-year extension for the relief that has been in place since 2020, which allows expanded no-cost access to telemedicine benefits without interfering with an individual's ability to contribute to a health savings account (HSA). President Biden signed the CAA 2023 into law on December 29, 2022.
As background, qualified high-deductible health plans (HDHPs) that are meant to allow individuals to contribute to an HSA must meet minimum statutory deductible and maximum out-of-pocket standards. When a plan sponsor provides HDHP participants with telemedicine benefits (or any other significant non-preventive medical care) at no cost before the participants meet the HDHP statutory deductible, those participants are ineligible to contribute to their HSAs.
Since 2020, Congress has taken various steps to ensure easier and more expansive access to telemedicine services during the pandemic to protect individuals' access to both physical and mental health care. To that end, Congress passed legislation that allowed participants in HDHPs to have access to free telemedicine services prior to meeting the HDHP statutory deductibles, thereby permitting the HDHP to remain qualified and allowing individuals to remain eligible to contribute to their HSAs.
The first piece of legislation, the Coronavirus Aid, Relief, and Economic Security Act of 2020, provided this relief in 2020 until plan years ending in 2021. Upon the expiration of this relief, plan sponsors could no longer provide those benefits at no cost without affecting their participants' ability to contribute to their HSAs. After the expiration of that relief, Congress passed the Consolidated Appropriations Act of 2022, which included a temporary extension of this relief from April 1, 2022 until December 31, 2022.
With the passage of CAA 2023, plan sponsors may continue to provide no-cost telemedicine interactions to HDHP participants on a pre-deductible basis without interfering with their ability to contribute to an HSA. The extension provides relief for plan years beginning before January 1, 2025.
Plan sponsors that wish to provide no-cost telemedicine services to HDHP participants beginning January 1, 2023, should communicate that change to participants, and if needed, amend the plan documentation to reflect such change.
The intent of this analysis is to provide general information regarding the provisions of current federal laws and regulation. It does not necessarily fully address all your organization's specific issues. It should not be construed as, nor is it intended to provide, legal advice. Your organization's general counsel or an attorney who specializes in this practice area should address questions regarding specific issues.