CAA-22 Legislation Includes Expanded Access to Telehealth Services | Practical Law

CAA-22 Legislation Includes Expanded Access to Telehealth Services | Practical Law

Congress has passed and the President has signed government funding legislation called the Consolidated Appropriations Act, 2022 (CAA-22). Among other provisions, the CAA-22 legislation temporarily extends certain relief provided in 2020 regarding telehealth and health savings accounts (under the Coronavirus Aid, Relief, and Economic Security (CARES) Act) to apply prospectively for 2022.

CAA-22 Legislation Includes Expanded Access to Telehealth Services

Practical Law Legal Update w-034-8037 (Approx. 6 pages)

CAA-22 Legislation Includes Expanded Access to Telehealth Services

by Practical Law Employee Benefits & Executive Compensation
Published on 14 Mar 2022USA (National/Federal)
Congress has passed and the President has signed government funding legislation called the Consolidated Appropriations Act, 2022 (CAA-22). Among other provisions, the CAA-22 legislation temporarily extends certain relief provided in 2020 regarding telehealth and health savings accounts (under the Coronavirus Aid, Relief, and Economic Security (CARES) Act) to apply prospectively for 2022.
Congress has passed and the President has signed government funding legislation called the Consolidated Appropriations Act, 2022 (CAA-22). The CAA-22 temporarily and prospectively extends rules regarding access to telehealth services in the health savings account (HSA) context that were enacted in March 2020 in response to COVID-19, the disease that results from SARS-CoV-2 and its variants (Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. L. 116-136, § 3701 (2020); see Legal Update, CARES Act Contains Numerous Employee Benefit Provisions, Including Changes to COVID-19 Testing Mandate).

CARES Act Rules Addressing Telehealth and HSA Eligibility; CAA-22 Extension

As background, the CARES Act amended the HSA rules under the Internal Revenue Code (Code) to state that a high-deductible health plan (HDHP) could provide telehealth and other remote care services without first meeting the plan's minimum deductible (26 U.S.C. § 223(c)(2); see Practice Note, Defined Contribution Health Plans: Definition of High Deductible Health Plan (HDHP)). Without this rule, access to telehealth services before satisfying the HDHP deductible could have meant the loss of HSA eligibility. Under the CARES Act provision, however, a health plan did not fail to be treated as an HDHP merely because it did not have a deductible for telehealth and other remote care services for plan years beginning on or before December 31, 2021. An individual covered under this type of health plan could contribute to an HSA.
This provision was effective on the CARES Act's enactment date (March 27, 2020), but could be applied retroactively to January 1, 2020 (IRS Notice 2020-29). For example, an otherwise eligible individual who had HDHP coverage and who also received coverage beginning February 15, 2020, for telehealth and other remote care services under a non-HDHP arrangement—and before satisfying the HDHP deductible—was not disqualified from contributing to an HSA during 2020.
The CAA-22 prospectively extends this CARES Act rule by making it applicable for months beginning:
  • After March 31, 2022.
  • Before January 1, 2023.
For more information, see Practice Notes:

Telehealth as Disregarded Coverage Under HSA Rules; CAA-22 Extension

The CARES Act also amended the Code's HSA rules to include telehealth and other remote care services as coverage categories that are disregarded in assessing whether an individual with other health plan coverage in addition to an HDHP is an eligible individual who may make tax-favored contributions to the individual's HSA. As a result, an otherwise eligible individual with HDHP coverage could:
  • Also receive coverage for telehealth and other remote care services outside the HDHP—and before satisfying the HDHP's deductible.
  • Still contribute to an HSA.
The CAA-22 extends this CARES Act provision prospectively by making it applicable for months beginning:
  • After March 31, 2022.
  • Before January 1, 2023.

Practical Impact: Scope of Telehealth Coverage

Early on in the COVID-19 pandemic, the federal administrative agencies recognized that:
  • The widespread availability and use of telehealth and other remote care services would be essential to combating COVID-19.
  • Many health plans and insurers were already offering benefits for telehealth and other remote care services in some form (in some cases, without cost-sharing).
These services helped individuals to seek treatment from health providers in their home, without having to go to a medical office or hospital, thereby reducing the risk of exposure to COVID-19.
The CAA-22's extension of the original CARES Act relief for telehealth and HSAs suggests that plans and insurers should continue to promote the use of telehealth and other remote care services. As with the CARES Act rules, participants and beneficiaries should be timely notified of the availability of this relief (see Standard Document, Summary of Material Modifications (SMM) Describing COVID-19 Benefits Option). In addition, the federal agencies have encouraged plans and insurers to provide coverage of telehealth and other remote care services:
In implementing guidance addressing the CARES Act amendments to the Code's HSA rules, the federal agencies took the view that the amendments:
  • Applied generally to coverage for health care provided through telehealth and other remote care services.
  • Were not limited to coverage for COVID-19-related telehealth and other remote care services.
The federal agencies will presumably take this interpretive view regarding the CAA-22 extensions, though guidance clarifying that point would be helpful.