As most health plans incorporate telemedicine into their group medical plan, the compliance requirements are generally outlined through their plan documents. However, for those offering telemedicine as a stand-alone benefit, there are still compliance obligations to fulfill.
With the increasing costs of healthcare, competing physician schedules, frequent work travel and more remote housing arrangements, telemedicine is becoming a popular venue in receiving medical attention with lesser wait times and around the clock availability. But did you know that while offering this great benefit to employees, there are also compliance requirements employers should be adhering to when it comes to telemedicine as it relates to ACA Market Reforms, ERISA, COBRA and HSA eligibility?
The Affordable Care Act (ACA), something that has become front of mind for just about all of us, is first on the list. Under the ACA’s preventative care mandate, a non-grandfathered group health plan is required to cover certain preventative care services without imposing cost-sharing for the services rendered. If telemedicine is offered as a stand-alone benefit to the employee, this would violate the ACA’s mandate and also subject the employer to a potential daily excise tax. Why the compliance issue? Telemedicine is a virtual form of receiving medical attention. Most preventative care services (screenings, immunizations and examinations) require an in person visit to the doctor’s office. If these services are provided by a network provider, they cannot impose a cost share to the employee. To make this benefit compliant with the ACA mandate, employers are encouraged to include telemedicine as a component of their overall group health plan.
No different than other group health plans offered, telemedicine benefits are also subject to ERISA and COBRA requirements. A written plan document must be provided, along with an SPD and if applicable a form 5500 filing must be completed. Additionally, if an employee terminates employment thus ending their medical coverage, COBRA benefits must be provided to the employee as it is a form of medical care provided.
Last but not least, is the question of how telemedicine integrates with HSAs, for both bundled and stand-alone plans. Although there is clarity on the compliance impacts for ACA mandates, ERISA and COBRA, this is not the case with HSAs. The IRS has not specifically addressed the impact telemedicine has on HSA eligibility. Telemedicine benefits that provide free or reduced cost medical benefits before a plan’s HDHP is met, may disqualify an HSA eligibility. This could impact an employee’s ability to make contributions to the account and/or request distributions for services received. As the rules of this arrangement are vague, legal counseling is often recommended to ensure all compliance requirements are being met.
As healthcare continues to change, so does the compliance that surrounds them. For further details on these topics, click here .