Consolidated Appropriations Act, 2022 Temporarily Extends Pre-Deductible Telehealth Coverage

This week President Biden signed the Consolidated Appropriations Act, 2022 (CAA 2022), a $1.5 trillion government funding bill, into law. Among other items, CAA 2022 temporarily reinstates health savings account (HSA) relief, which allows high deductible health plans (HDHPs) to waive the deductible for telehealth and other remote care services from April 1, 2022-December 31, 2022, regardless of the plan year and without causing plan participants to lose HSA eligibility.

By way of background, the Coronavirus Aid, Relief, and Economic Security (CARES) Act permitted HDHPs with HSAs to cover pre-deductible telehealth services beginning in 2020; however, this extension expired on December 31, 2021 for plans operating on a calendar year basis. The CAA 2022 reinstates the CARES Act telehealth provisions beginning in April and extending through the end of December. Thus, for these months, participants may make HSA contributions without having disqualifying non-HDHP coverage.

Some key points about the extension:

• Telehealth services do not need to be preventative or related to COVID-19 to qualify for the relief
• This relief is optional for employers to adopt so if an employer deems the relief to be too difficult to communicate or administer, an employer is not required to offer the restored CARES Act exceptions
• The relief will not apply for the period between January 1, 2022 and March 31, 2022
• This relief applies on a monthly basis as opposed to a plan year basis. Consequently, for non-calendar year plans, the HDHP will need to make a mid-year change to make non-COVID-19-related (or non-ACA-required preventive care) telehealth visits on or after January 1, 2023 subject to the Code’s minimum deductible requirements
  • Under the CARES Act, the relief applied to “plan years beginning on or before December 31, 2021”
  • Under CAA 2022, the relief applies “in the case of months beginning after March 31, 2022, and before January 1, 2023”
• The employers who expected that Congress would extend the CARES Act telehealth relief without any gap and without applying the minimum deducible will need to determine whether their plans can and should apply the minimum deductible to telehealth and other remote care services on a retroactive basis during the gap period. We are waiting for more guidance to be released on this point

In determining whether to allow this flexibility, employers should consider the following:

• Employers will need to communicate all changes clearly to their employees as the relief provided can be confusing (e.g., for some plans, including calendar year plans, the relief will not apply for the months of January through March, and thus those plans will still need to apply their minimum deductible to telehealth and other remote care services)
• Plan documents will need to be updated to explain adopted changes
• For fully-insured plans, employers should confirm whether their insurer will be permitting this relief
• For self-insured plans, employers should check with their third-party administrator to see if their systems are able to accommodate these changes

National Health Emergency to Extend Beyond March 1, 2022

On February 18, 2022, President Biden announced an extension of the National Emergency concerning COVID-19, stating that the COVID-19 pandemic continues to cause significant risk to the public health and safety of the nation, and thus, must continue in effect beyond March 1, 2022. In particular, this extension impacts relief related to the following employee benefit plan deadlines:

• HIPAA Special Enrollment.
  • The 30-day period (or 60-day period, if applicable) to request special enrollment
• COBRA Notice and Election Periods.
  • The 60-day period to elect COBRA coverage
  • The date for making COBRA premium payments (generally at least 45 days after the day of the initial COBRA election, with a grace period of at least 30 days for subsequent premium payments
  • The date for individuals to notify the plan of a qualifying event or disability determination (generally 60 days from the date of the event, loss of coverage or disability determination)

• Claims Procedures and External Review Process Time Frames
  • The date within which individuals may file a benefits claim under the plan’s claims procedure, and the date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure
  • The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination, and the date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete

As a result of the extension, these deadlines can continue to be disregarded until the earlier of one year from the date individuals were first eligible for relief or 60 days after the announced end of the National Emergency (referred to as the “Outbreak Period”).

NOTE: The extension of the National Health Emergency is separate from the U.S. Department of Health and Human Services (HHS) public health emergency, which was most recently renewed January 16, 2022 and continues for 90 days. The public health emergency impacts HHS and its operations and does not affect employee benefit plan deadlines directly.

ADDITIONAL INFORMATION

Please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.

Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.