23 December 2022

Two-Year Extension of Relief for HDHPs and Telemedicine to Become Law

As of December 23, 2022, both the Senate and the House have passed and President Biden is expected to sign into law a two-year extension (generally, until December 31, 2024) of the relief for high deductible health plans (“HDHPs”) and telemedicine.  The two-year extension is included as part of the $1.7 trillion government spending package, which is titled the Consolidated Appropriations Act, 2023 (the “CAA 2023”).  As many plan sponsors of HDHPs are aware, offering a telemedicine medicine benefit in conjunction with an HDHP can potentially jeopardize the health savings account (“HSA”) eligibility of participants in the HDHP.

The federal government first offered temporary relief for this problem under the CARES Act.  Under the CARES Act, HDHPs were allowed to provide telemedicine benefits (and other remote care services) at no cost to participants before the satisfaction of the minimum HDHP deductible without causing a participant to lose HSA eligibility.  (We previously provided an in-depth discussion of the potential problem (and the potential solutions) with respect to HDHPs and telemedicine benefits in our previous client alert here.)  However, the CARES Act relief only applied for plan years beginning on or before December 31, 2021.

In the government funding bill signed by President Biden on March 15, 2022 (the “Consolidated Appropriations Act, 2022” or “CAA 2022”), the federal government generally renewed this CARES Act relief for April 1, 2022 through December 31, 2022.

Now, under the CAA 2023, the telemedicine relief is generally extended through December 31, 2024.  Specifically, the telemedicine relief applies for plan years beginning on or after January 1, 2023, and before January 1, 2025.

We suspect that this extended relief will be welcome news for most plan sponsors of HDHPs that also offer a telemedicine benefit.  However, we anticipate that many plan sponsors are still hoping for a permanent extension of the telemedicine relief in the future.

If you have any questions about HSAs or HDHPs, please contact a member of the Miller Johnson Employee Benefits and Executive Compensation practice group.