Telemedicine and HSAs

Telemedicine Coverage and HSAs: A Recap

Many types of telemedicine coverage eliminate the ability for a person enrolled in a qualified high deductible health plan (HDHP) to make contributions to a Health Savings Account (HSA).

HDHPs have a minimum deductible threshold, and in 2022 that threshold is $1,400 for a person with single-only coverage and $2,800 for a person with family coverage. In addition, there can be no coverage for anything other than preventive care or excepted benefits (e.g., dental or vision coverage) until the minimum deductible threshold has been satisfied. This prohibition applies not only to the underlying HDHP, but also to benefits provided under another plan or program.

What does this mean?

This means telemedicine benefits that provide coverage with no copay or a low copay (provided through the HDHP or on a stand-alone basis) generally eliminates the ability to make contributions to an HSA; however, the CARES Act provided a temporary provision which allowed for telemedicine coverage without it impacting the ability to contribute to an HSA. The CARES Act enabled that provision for 2020 and 2021 plan years.

About the New Law

More recently, President Joseph Biden signed a spending bill into law. The new law permits telemedicine coverage of any kind between April 1, 2022 and December 31, 2022 without it impacting the ability for a person to make contributions to an HSA.

This does, however, mean there is a gap between January 1, 2022 and March 31, 2022 where some plans (generally, those plans that run on a calendar year) must apply the minimum deductible for telemedicine services in order a person to be considered HSA-eligible during the months of January through March.

Absent another law being passed, most telemedicine programs will eliminate HSA eligibility again starting in 2023.