On March 15, 2022 President Biden signed government funding legislation referred to as the Consolidated Appropriations Act, 2022 (CAA-22) into law. The CAA-22 temporarily extends the rules enacted in March 2020 in response to the COVID-19 pandemic, providing payment for telehealth services and other remote care services from a High Deductible Health Plan (HDHP) and related Health Savings Account (HSA) without first meeting the plan's minimum deductible under IRC Code Section 223(c)(2).
Under the original rule found in the CARES Act, a health plan did not fail qualification as an HDHP merely because it did not include a deductible requirement for telehealth and other remote care services for plan years beginning on or before December 31, 2021, meaning that it was originally intended to expire at the conclusion of 2021 for calendar year plans. If a calendar year plan is in place, minimum deductibles would need to be applied to telehealth and remote services for the months of January 1 – March 31, 2022. As extended, the rule will now continue to allow individuals with first dollar telehealth services to contribute funds to an HSA without encountering any HSA eligibility issues.
This provision was effective on the CARES Act's enactment date, March 27, 2020, but was allowed to be applied retroactively back to January 1, 2020, as per IRS Notice 2020-29. The CAA-22 prospectively extends this CARES Act provision by allowing a HDHP to adopt first dollar telehealth services for the period of April 1, 2022 through December 31, 2022.
This relief does not apply for the first three months of 2022. Therefore, calendar year plans must still apply the minimum deductible to telehealth and other remote care services for the period of January 1, 2022 through March 31, 2022. HDHP plan years beginning on or after April 1, 2021, are unaffected by the three-month gap because the CARES Act relief does not expire until the end of those plans’ years.
It should be mentioned as well that the extension of telehealth relief is optional and must first be implemented by the plan sponsor. If a plan sponsor opts to implement the relief, they should do the following:
- If fully insured, the plan sponsor should contact their carrier to assist with the adoption of the telehealth relief from April to December 2022; once adopted, the plan sponsor should ensure that their plan documents are properly updated and that plan participants are notified.
- If self-funded, the plan sponsor should discuss these changes with their third-party administrator (TPA) and stop-loss carrier; once adopted, the plan sponsor should ensure that their plan documents are properly updated and that plan participants are notified.