By: HUB’s EB Compliance Team

The Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020) Act amended Section 223(c) of the Internal Revenue Code to temporarily allow high-deductible health plans to cover telehealth and other remote care services on a first dollar basis (that is, before reaching the deductible). See IRS Notice 2020-29. However, this relief is ending and will not be available to plan years that begin on January 1, 2022 or later.

Back to the Future

Upon the expiration of this temporary CARES Act relief, plans will need to be sure to apply prior limitations to the use of telemedicine within an HSA-compatible high deductible health plan, to avoid violation of IRS “first dollar rules” requiring that the HSA participant first satisfy his/her deductible before receiving plan coverage for most non-preventive services. In addition, plans will need to be sure to follow rules that require the plan to charge a reasonable fee and apply charges to the deductible and out-of-pocket maximums.

With the imminent expiration of the temporary telemedicine or other remote care relief provided by the CARES Act, some federal legislators have introduced legislation to expand or extend access to telehealth and other remote care services. However, unless and until such proposals become law, employers should plan to start charging for telehealth services again with the 2022 plan year.

Takeaways and Next Steps

  • The CARES Act temporary relief allowing high-deductible health plans to cover telehealth and other remote care services without a deductible or with a deductible below the minimum annual deductible expires as of the first plan year on or after January 1, 2022.
  • Upon the expiration of this temporary relief, plans will need to be sure to apply prior limitations to the use of telemedicine within an HSA-compatible high deductible health plan. This includes charging a fair market value fee for the telehealth visit before the plan deductible is met and applying that fee toward the deductible and out-of-pocket maximums.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization's or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization's specific situation in light of your or your organization's particular needs.