Telemedicine & High Deductible Health Plans (HDHPs): The Full Story

by | Apr 15, 2020 | Benefits

Update: As telemedicine gets more attention than ever, we know you may have questions about how your employees on an HDHP can use this service. We’ve updated this 2017 post to include the latest guidelines in the wake of the coronavirus pandemic. Learn more about how HealthJoy is responding to the coronavirus.

 What is Telemedicine?

Before we talk about High Deductible Health Plans (HDHPs) and why telemedicine is treated differently under those plans, let’s first define telemedicine. Telemedicine, or what we refer to at HealthJoy as “online medical consultations,” is a technology that allows medical professionals to evaluate, diagnose and treat patients through video or audio technology (see Why Telemedicine Use is Skyrocketing for more). This approach has been growing in popularity over the last decade with the release of the iPhone, and positively exploded as a no-contact solution during the coronavirus outbreak.

Over 70% of all traditional medical visits can be handled via telemedicine. Even during the pandemic, it’s estimated that 80% of cases of COVID-19, the disease caused by the novel coronavirus, will be mild enough for online treatment via telemedicine. Our current crisis aside, online consultations have many advantages over traditional in-office visits.

  • Nearly instant consultations – The average consultation through HealthJoy happens within ten minutes, with no appointment necessary.
  • No or low cost – Telemedicine has little to no cost fo HealthJoy members, and helps employees avoid costly ER and urgent care visits, saving companies money.
  • No travel time – No Ubers, trains, driving, or gas – members get on-demand access right from their mobile phone.
  • No germ-filled waiting rooms – The coronavirus has forced us to rethink nearly all our interactions. Perhaps we should always have been suspicious of waiting rooms. According to a report in the Journal “Infection Control and Hospital Epidemiology,” you’re more likely to get sick after visiting a doctor’s office.
  • Less time away from work – A report from the American Journal of Managed Care estimates it takes 121 minutes each time someone seeks medical care. The total includes 37 minutes of travel time, and 87 minutes at the doctor’s office. Astoundingly, total average time with a doctor is only 8 minutes.
  • Easier on your life – Telemedicine provides less interruption for people’s lives, specifically for those with elder or child care responsibilities.

Introducing HealthJoy QuickLaunch: We’ve created a version of our benefits experience platform that meets the immediate needs of employees, with telemedicine and concierge support in just two business days. 

These factors are driving an increase in telemedicine benefit offerings—if not in actual use of the service—every year. For instance, only 23% of employers surveyed by SHRM offered telehealth in 2016, but that number rose to 72% in 2019. Telehealth offerings increased by 10% between 2018 and 2019 alone. Employers usually offer these programs either as a single-point solution, or as part of an employee benefits experience platform. When employees use telehealth, these programs can save both the employer and employee time and money by routing care from expensive facilities like urgent care and emergency rooms.

What’s the deal with Telemedicine and High Deductible Health Plans (HDHPs)?

The federal government’s messaging on HDHPs that qualify for health savings accounts (HSAs) and telemedicine has, at least so far, been confusing.

The issue stems from the fact that providing a telemedicine plan with zero copay or at a low set rate could render an individual ineligible to receive or make contributions to their HSA. Though the IRS is aware that this creates a problem, it hasn’t committed to issuing guidance. Also, no law firm will issue a legal opinion on the matter due to the vagueness of the rules.

As it stands, you can’t cover people with HSA’s under any “disqualifying coverage.” This includes any provided healthcare coverage before meeting the HDHP deductible; people refer to this issue as the “no first-dollar coverage” issue.

The IRS does allow exceptions for some coverage including “permitted insurance,” “exception benefits,” discount cards, employee assistance programs, and preventive care. The IRS also issued guidance that HDHP’s covering COVID-19 testing and treatment won’t disqualify HSA contributions (more on that below). Having telemedicine alone as a part of a benefits package won’t disqualify an employee, but to be safe, most telemedicine providers recommend a per-visit fee for those users that are HDHP-eligible.

The exact dollar figure of that fee is the big unknown. HealthJoy can’t recommend exact dollar amounts, but our program has the flexibility to accommodate any fee. We are happy to share general information about what we’re seeing across our client base in terms of HDHP telemedicine fees. Until there’s more government clarity, we will remain flexible. For non-HSA eligible plans, we offer a free telemedicine service.

What’s in store for the future?

We don’t yet have as much clarity as we’d like about the tension between telemedicine and HDHP’s. For the time being, at least, rules for HDHP’s and coronavirus coverage are far more explicit. The IRS announced on March 11 that medical care services associated with testing for and treatment of COVID-19 may be provided by a qualified HDHP on a pre-deductible basis. This coverage will not interfere with an individual’s ability to make or receive health savings account (HSA) contributions.

On March 27, President Trump passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It provides a temporary safe harbor for employers who cover the cost of telehealth services before a deductible is met. This elimination of the “no first-dollar cost” rule only applies to plans before 2022, so it’s not a long-term solution to the tension between telemedicine and HDHP’s. However, at a moment when our healthcare system is so strained, it’s good to see the federal government bringing down this barrier to in-home care.

telemedicine and hdhp
Telemedicine Benefits Guide

Telemedicine use is growing at an exponential rate. In this guide, we’ll share our best tips on how to make this underutilized benefit work better for your company.

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