If an employer group engages a telemedicine vendor outside of their health plan and offers telemedicine to their employees, would this be considered a first dollar benefit and nullify the HSA status? What happens if the telemedicine vendor also offers mental health services?
Telemedicine coverage does not currently make an individual HSA ineligible due to temporary relief that extends through the end of 2022. This relief applies whether telemedicine services are provided within an HDHP or outside the plan, and telemedicine services can include mental health services.
The timing of the temporary relief period is a little complicated because two different relief periods created a gap for calendar year plans:
- For calendar year plans (plans beginning on January 1, 2022), participants with telemedicine coverage that has no, or low, cost-sharing are HSA ineligible from January through March 2022. However, these participants are HSA eligible from April through December 2022. This means that a participant who is otherwise HSA eligible for all of 2022 can make a maximum HSA contribution of 75% (9/12) of their normal HSA annual contribution.
- For non-calendar year plans that began before December 31, 2021, the prior relief applies through the end of that plan year in 2022, and the new telemedicine/HSA relief applies through December 31, 2022.