One of the most appreciated features available to participants in high deductible health plans (HDHPs) was the Health Savings Account (HSA) safe harbor that allowed HDHPs to waive the deductible for telehealth services without causing members to lose HSA eligibility. HDHP plan participants and plan sponsors alike had hoped that Congress would act to extend the waiver for plan years that begin on and after January 1, 2025. (The waiver had been available for HDHP plan years beginning before January 1, 2025.) However, this waiver extension was not included in the last bills passed by Congress this month. This means for calendar year plans, the waiver ends as of December 31, 2024.
The HDHP deductible waiver and corresponding HSA safe harbor originated as part of a broad range of measures enacted in the Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 to provide relief during the COVID-19 emergency. The waiver was further extended in subsequent legislation but was set to expire on December 31, 2022. On December 29, 2022, the Consolidated Appropriations Act of 2023 (CAA 2023) became law and provided an extension of the HSA safe harbor. Without the CAA 2023 extension, on January 1, 2023, HDHPs that provided this waiver would have had to start charging members for telehealth services until their deductible was met. Now, without a further extension of the HSA exception, meeting the deductible will be required for HDHP members to remain eligible to make HSA contributions or to receive their employers' HSA contributions.
Recommended Actions for Employers Offering HDHPs
Plan sponsors that had provided the deductible waiver for telehealth coverage under their HDHPs through the end of 2024 need to contact their health insurance carrier or third-party administrator to ensure the deductible waiver will no longer be administered as of December 31, 2024 (for calendar year plans).
Plan sponsors will also need to communicate with plan participants the plan design post-2024 so that participants know and understand that the HDHP will no longer provide first-dollar coverage for telehealth services.
Employers will want to keep watch for future guidance that reinstates the waiver temporarily or that makes these rules permanent, given their popularity and the cost-savings that occur when telehealth is used by plan participants in place of in-office visits.
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