Permanent Standalone Telehealth Coverage Becomes a Possibility as Bill Advances
Earlier this year, a bipartisan group of lawmakers in the House of Representatives introduced H.R. 824, also known as the Telehealth Benefit Expansion for Workers Act of 2023 (the “Telehealth Bill”), in an effort to counter the upcoming expiration of certain health plan-related relief tied to the COVID-19 pandemic and national emergency declarations. This relief, most notably, includes the ability for employers to offer standalone telehealth coverage for employees who are not otherwise eligible for the employer’s health plan.
As background, following the declaration of the COVID-19 public health emergency, the federal government (through the Department of Health and Human Services, the Department of Labor, and the Treasury Department) temporarily waived certain group health plan rules to allow applicable large employers (those with 50 or more full-time employees) to offer telehealth services to employees who are not eligible for any employer-sponsored group health plan. This means, on a temporary basis, qualifying employers could offer telehealth and remote care services as “excepted benefits” to certain employees, and such arrangements were exempt from having to satisfy certain group health plan mandates. This relief was limited to telehealth and remote care arrangements offered to employees who are otherwise ineligible for the employer’s group health plan, like part-time, reduced-hour, and/or seasonal workers. Following the end of the public health emergency on May 11, 2023, this relief is set to expire at the end of the plan year that begins on or before May 11, 2023 (i.e., December 31, 2024 for calendar year plans).
The Telehealth Bill aims to make permanent this temporary relief, which many employers and employees have come to rely on during the past few years. More specifically, the Telehealth Bill would permit employers to offer excepted-benefit standalone telehealth coverage, similar to dental and vision plans, to all employees, not just those employees who are otherwise ineligible for the employer’s medical plans (in contrast to the temporary COVID-19 relief). Under this legislation, standalone telehealth coverage could be offered alongside traditional health plans, like many vision and dental plans, and while it would not be a replacement for traditional health plan coverage, it would help provide employees, including those ineligible for traditional health coverage with a way to receive timely and affordable medical care. Moreover, such arrangements, as excepted benefits, will be able to avoid compliance with many federal rules and regulations applicable to group health plans.
Opponents of the Telehealth Bill argue that it allows such arrangements to skirt around important consumer protections under the ACA and other laws. Notably, however, the Telehealth Bill does attach some ACA protections to any standalone telehealth arrangements, including the prohibitions against preexisting condition exclusions and health status discrimination and protections against certain benefit rescissions. On the other hand, proponents of the Telehealth Bill argue that standalone coverage will help employees and employers alike. Specifically, proponents assert that such arrangements will reduce the need for employees to take time off work to seek medical care, while also providing more treatment options for employees, including those employees with mobility or transportation issues, and/or those employees who live in rural areas with limited provider options.
In June, the Telehealth Bill cleared a major legislative hurdle as it advanced through the Education and the Workforce Committee of the House of Representatives. This leads the way for consideration by the full House of Representatives later this summer or early fall.
Plan sponsors who have implemented the temporary standalone telehealth relief will need to monitor developments on the Telehealth Bill. If the Bill is not passed later this year, such plan sponsors will need to consider what to do going forward as they will no longer be able to offer such coverage on a standalone basis. Any plan sponsors that wish to continue to provide telehealth services on a similar basis will have to come into compliance with all laws applicable to major medical plans (unless the Telehealth Bill is passed and signed into law). In the event a plan sponsor must or chooses to wind down such relief, it should provide a communication to impacted employees at least 60 days prior to the expiration of coverage.
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