Telehealth Exemption for HDHPs Set to Expire December 31, 2024
By Britni Summers
Effective January 1, 2025, plan sponsors offering high-deductible health plans (HDHPs) with Health Savings Accounts (HSAs) can no longer cover telehealth services before the deductible is met. The telehealth exemption was originally introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, designed to provide relief during the COVID-19 emergency. This exemption expiration comes after Congress chose not to extend the telehealth HSA safe harbor in the American Relief Act of 2025, passed in late December to provide temporary federal funding.
The new rule applies to all plan years beginning on or after January 1, 2025, which means that plan sponsors can continue reimbursing individuals for telehealth services before the deductible is met for plan years beginning before January 1, 2025.
For HSA-qualified HDHPs with plan years starting on or after January 1, 2025, telehealth services cannot be reimbursed before the deductible is met. Allowing such reimbursements could disqualify the HDHP as HSA-eligible, preventing participants from contributing to an HSA for that plan year. To maintain compliance, plan sponsors should ensure that telehealth services provided before the deductible is met are subject to cost sharing, except when the service qualifies as a preventive benefit under the ACA.
Plan sponsors may choose to contact their health insurance carrier or third-party administrator to confirm that the waiver will no longer be applied after the deadline. If you have additional questions about the waiver expiration, please contact any member of McGrath North’s Employee Benefits team.
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