Q & A with BBBA – Compliance issues for employers offering telemedicine benefits
Q: Our organization is considering including telemedicine as a part of our healthcare benefits package for employees.Â Are there any compliance issues, or laws, we should be aware of?
A: Telemedicine benefits have seen significant growth recently.Â The technology allows individuals to access healthcare via cell phone, tablets, or desktop and laptop computers without being in the same physical space as a medical provider.Â It can make health care more accessible and affordable for individuals while lessening the impact of health care related absences for employers.
While these aspects of the benefit are great for employees, it is important for employers to keep the following in mind as you prepare to implement a telemedicine benefit:
- The Affordable Care Actâ€™s (ACA) market reforms â€“ on its own a telemedicine benefit cannot comply with the ACAâ€™s preventive care mandate because many preventive care services such as immunizations, screenings and exams require in-person visits with an individualâ€™s health care provider. Non-compliance with this mandate may trigger an excise tax of $100 per day with respect to each individual to whom the failure relates. To avoid violating the ACAâ€™s preventive care mandate, employers should integrate a telemedicine benefit with their group medical plan coverage to employees who participate in the plan.
- ERISAâ€™s reporting and disclosure requirements â€“ private sector employers have to comply with ERISA which sets minimum standards for employee benefit plans (government and church employers are exempt).
- Describe telemedicine benefit (terms and operations) in an official plan document;
- Define the planâ€™s terms and rules to participants through a summary plan description (SPD);
- Annually file Form 5500 for the plan;
- Comply with certain fiduciary standards of conduct regarding the plan;
- A claims and appeals process needs to be established for participants to receive benefits from the plan.
- COBRAâ€™s continuation coverage requirements â€“ businesses (with 20 or more employees) with covered group health plans are required to offer continuation coverage to employees, spouses and dependent children when group health coverage would be lost due to certain specific events such as loss of employment. Since telemedicine benefits provide medical care, they are considered to be group health plans and subject to COBRA. Be mindful when designing COBRA practices so that only qualified recipients who elect COBRA for a group medical plan are eligible for the telemedicine benefits.
High Deductible Health Plans
A benefit area to pay close attention to are High Deductible Health Plans (HDHP). Should your organization offer employees an HDHP with a Health Savings Account (HSA), you will need to consider the telemedicine benefitâ€™s possible ramifications to a participantâ€™s eligibility for HSA contributions.
Generally, individuals cannot have health coverage other than HDHP coverage to be eligible for HSA contributions. This means that an HSA-eligible individual cannot be covered under a health plan that provides coverage below the HDHP minimum annual deductible. The structure of the telemedicine benefit will determine whether telemedicine is a disqualifying coverage for HSA purposes.
In general, telemedicine programs that provide free or reduced-cost medical benefits before the HDHP deductible is satisfied are disqualifying coverage for purposes of HSA eligibility. Under the IRSâ€™ general rules for HSA eligibility, a telemedicine program may not prevent an individual from contributing to an HSA if the program satisfies one of the design options described below.
- The telemedicine program is offered as part of the HDHP and the programâ€™s benefits are subject to the HDHP deductible (with the exception of preventive care benefits).
- The telemedicine program is not considered a “health plan” under the HSA eligibility rules because it does not provide significant benefits for medical care or treatment.
- Benefits under the telemedicine program are limited to preventive care services.
In short as you prepare to integrate this benefit into your current offerings, be sure to discuss with your broker about structuring telemedicine within your groupâ€™s medical plan coverage (donâ€™t forget about COBRA), plan on filing Form 5500 annually (ERISA), and last but not least your groupâ€™s HDHP/HSA benefits (if offered).
For more information to create a comprehensive Employee Benefits plan for your organization, or to speak with one of our advisors, email Jason Della Penna firstname.lastname@example.org.