Separately, the agencies responsible for enforcing prescription drug reporting have issued good faith relief, an extension, and some additional flexibility in reporting.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020) allowed high-deductible health plans to cover telehealth and other remote care services on a first-dollar basis (that is, before reaching the deductible) through the end of 2021. Then, Congress resurrected this relief in April 2022 after a three-month hiatus. This relief was scheduled to end on December 31, 2022 (regardless of a plan’s plan year), but Congress has resurrected it yet again.
Separately, the Consolidated Appropriations Act, 2021 required health plans to report certain information about their prescription drugs and health plan information. The reporting presented significant challenges for employers and their service providers. The agencies have now given some additional relief.
TELEHEALTH: BACK TO THE FUTURE (AGAIN)
As part of its last-minute funding push, Congress slipped this extension into its omnibus funding bill. Under this extended rule, HDHPs will be able to offer telehealth services before the deductible without impacting HSA eligibility through plan years beginning before January 1, 2025.
TELEHEALTH: NON-CALENDAR PLAN YEAR GAP
However, the way the legislation is written, there’s a small gap for non-calendar year plans. The brief resurrection of the relief only applied through December 31, 2022, regardless of plan year. The new extension applies for plan years beginning after December 31, 2022.
For example, an HDHP with a plan year beginning June 1 could not offer telehealth before the deductible for the period from January 1, 2023 through the end of May 2023. Any HDHP that does not have a calendar plan year would have a similar gap between January 1, 2023 and its plan year start.
PRESCRIPTION REPORTING: GOOD FAITH & OTHER RELIEF
As widely requested by lobbying groups, the relevant agencies issued on December 23 additional FAQs that provide good faith and other reporting relief. Specifically:The relief also provided some flexibility for the mechanics of reporting, including:
TAKEAWAYS
While the telehealth extension is welcome news, non-calendar year plans should take note of the gap identified above. The IRS may attempt to provide relief through guidance early next year, but in the meantime, those plans should expect to stop making any payments for pre-deductible telehealth coverage.
As for the prescription reporting relief, despite coming at the next-to-last minute, the changes are welcome. Plan sponsors should study the guidance closely and work with their service providers to make any necessary modifications to their reporting strategy.
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