On December 23, 2022, U.S. Congress approved the Consolidated Appropriations Act, 2023 (CAA 2023). The healthcare provisions in this act extend the temporary telehealth safe harbor for High Deductible Health Plans (HDHP) first-dollar coverage through December 31, 2024.
EXTENSION OF THE SAFE HARBOR FOR HDHPS TO COVER TELEHEALTH SERVICES
Originally the CARES Act established a temporary safe harbor that permitted HDHPs to cover telehealth and remote care services on a first-dollar basis without jeopardizing Health Savings Account (HSA) contributions. Covered individuals who received these services were still able to contribute to their HSAs because telehealth services were temporarily disregarded for purposes of HSA eligibility in determining whether an individual can make an HSA contribution.
The original CARES Act provision applied to plan years beginning on or before December 31, 2021 and was set to expire at the end of 2021. In March 2022, Congress extended the safe harbor until December 31, 2022. Through the CAA 2023, Congress has extended the safe harbor period again, now through December 31, 2024. This extension will allow HDHPs with plan years beginning after December 31, 2022 and before January 1, 2025 to rely on the safe harbor and continue coverage of telehealth services without disqualifying coverage for HSA contributions.
Although this extension is welcome news, a more permanent solution would be better. There is various legislation that aim to make first dollar telehealth services a permanent change, which we anticipate may be taken up by Congress in 2023. Diversified Group will keep you up to date on any action taken.