Telehealth Waiver for High-Deductible Health Plans Facing Uncertain Future

Telehealth services have provided an essential lifeline to millions of Americans who’ve needed behavioral, primary and specialist care during the pandemic, thanks in large part to regulatory waivers that eased long-standing access and reimbursement restrictions. Between 2019 and 2020, Medicare telehealth visits exploded 63-fold, from 840,000 to almost 53 million.

Expanded Access

The waivers supporting telehealth’s rapid growth were primarily centered on Medicare and Medicaid services. However, another pandemic-related regulatory change in 2020 temporarily allowed employers to offer pre-deductible, first-dollar coverage for telehealth services to workers with high-deductible health plans (HDHPs).

The waiver, or safe harbor, was included in the 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act. It altered the rules surrounding employees’ pre-tax contributions to health savings accounts (HSAs) by giving employers the option to cover telehealth services without requiring employees to spend down their deductible. In practical terms, the change improved care access for employees who otherwise would have avoided telehealth services due to out-of-pocket expense.

Expiration Looms

While telehealth’s expansion for the most part has been embraced by patients, providers, payers and employers alike, it remains unclear whether utilization can be sustained as the pandemic winds down. The Medicare waivers are set to expire at the end of the Public Health Emergency (PHE), which was recently extended 90 days to Jan. 11, 2023, while the HDHP waiver is slated to end December 31. Although several bills circulating in Congress would make the telehealth waivers permanent, the House and Senate have yet to reach a consensus on how to move forward.

Widespread Employer Support

Loss of the HDHP waiver would represent a major blow for both employees and employers, given the rule change has enjoyed widespread uptake in the purchaser community. A survey by the Employee Benefit Research Institute (EBRI) found that 96% of employer respondents had adopted pre-deductible coverage for telehealth services as a result of the CARES Act waiver. More than three-quarters of employers want the waiver to become permanent.

About 67 million people are currently covered by HSAs, according to the Alliance for Connected Care, with 78% of health savings account-holders having an annual household income of less than $100,000. Approximately 40% of the nearly 180 million Americans with employer-sponsored insurance are covered by an HDHP-HSA plan, according to AHIP, and the vast majority of those plans cover telehealth services on a pre-deductible basis.

Chronic Disease Treatment Waiver

As the use of high-deductible health plans has increased in the face of rising health care costs, regulators have made other rule changes designed to expand pre-deductible benefits. In 2019, the IRS allowed HDHPs to provide pre-deductible coverage for 14 treatments and medications that help manage or mitigate a variety of chronic diseases and complications.

Two years later, a survey found that 75% of large employers offering HSA-eligible plans had expanded pre-deductible coverage to include the chronic disease drugs and treatments.

Multiple Telehealth Benefits

Convenience and satisfaction scores for both providers and patients have increased markedly because of expanding telehealth capabilities, and both groups report they plan to continue using telehealth services. Importantly, and despite initial fears that telehealth’s rapid emergence could open the doors to widespread fraud and abuse, evidence points to a range of important benefits flowing from the pandemic-driven telehealth surge.

For example, a recent report by the Department of Health and Human Services’ Office of Inspector General found significantly expanded access to, and use of, telehealth services by urban, Hispanic, and female beneficiaries.  Telehealth played a major role in helping meet soaring behavioral health demands during the pandemic. At its peak, 40% of mental health and substance use outpatient visits were conducted via telehealth.  Indeed, a recent study found that rural Medicare beneficiaries relied on out-of-state telehealth providers for primary and mental health services.  It has also been noted that telehealth allows clinicians to deliver better care with lower overhead, reduces out-of-pocket costs to patients and improves coordination of chronic care management.

A Unified Call to Action

In mid-November, PBGH was among more than 350 organizations, including a wide range of employers, business groups and others, that signed a letter calling for congressional leaders to extend the HDHP telehealth waiver before its expiration at year-end.

“Without congressional action, employers will be required to charge employees more to access telehealth services, creating a barrier to care, including mental health treatment,” the letter states. “Unfortunately, more Americans need access to affordable mental and behavioral health services, not less…Allowing employers and health plans to continue offering these important services pre-deductible improves affordability and expands access.”