Telemedicine and High Deductible Health Plans (HDHPs): The Full Story
What is Telemedicine?
Before we talk about High Deductible Health Plans (HDHPs) and why telemedicine is treated differently under those plans, let’s discuss what’s telemedicine. Telemedicine, what we call a more consumer-friendly “online medical consultations,” is the ability of medical professionals to evaluate, diagnose and treat patients through the use of telecommunication technology (via video or audio only.) This approach has been growing in the last decade with the release of the iPhone and as a report from Business Insider says “Many believe that 2018 could be the tipping point” for the technology.
Over 70% of all traditional medical visits can be handled via telemedicine and consumers are getting more comfortable with using it. Online consultations, as an alternative to in-person visits, have a bunch of advantages:
- 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 to 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, anytime, anywhere.
- No germ-filled waiting rooms – According to the Journal, Infection Control, and Hospital Epidemiology, you’re more likely to get sick after visiting a doctor’s office, but I’m sure you have always suspected that.
- Less time from work – A report from the American Journal of Managed Care says 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. Total time with the doctor is only 8 minutes.
- Easier on your life – Telemedicine has less interference to people’s life – specifically elder or child care responsibility. Not to mention that the wait time for a new patient-physician appointment has risen to an average of 24 days.
There has been an exponential increase in the number of employers that offer telemedicine as part of an employees benefit package. These programs are usually offered as either as a single point solution (these have lower utilization) or as part of a healthcare guidance platform (like HealthJoy.) 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)?
Well, the government being the government, they have created a bit of confusion when it comes to employers offering HDHPs that qualify for health savings accounts (HSAs) and telemedicine. The issue stems from providing a telemedicine plan with zero or at a low cost could render an individual ineligible to receive or make contributions to their HSA. This is a known issue by the community, and the IRS is aware there is a problem but has not committed to issuing guidance on it. 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 HSAs under any “disqualifying coverage.” This includes any provided healthcare coverage before meeting the HDHP deductible; people refer to this issue as the “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. 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. As to the dollar figure of that fee, that is the big unknown. HealthJoy doesn’t have a recommendation about exact dollar amounts, but it’s program has flexibility to accommodate any amount on a per client basis and can share general information about what it is seeing across its 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 free telemedicine service at part of our service.
What’s in store for the future?
This summer, the House of Representatives passed two bills that could change the way employees can use their HSAs. These bills have been supported by both parties and are seen as an improvement to the existing law. In reference to telemedicine, they would allow HDHPs to cover preventive care outside the deductible. We are still waiting for the Senate to pass their version and then those bills will need to go through reconciliation. However, we are hopeful for more clarity on the issue that would enable us to offer free consultations to all HealthJoy members, which we fully support.