- On July 13, 2018
According to the Society for Human Resource Management’s (SHRM) 2018 Employee Benefits Survey of over 3500 human resources professionals from businesses of all sizes, this year 62% of companies offered a benefit to provide for diagnosis, treatment or prescriptions by phone or video beyond a nurse’s helpline. According to SHRM, the inclusion of telemedicine benefits in-group health plan coverage is up 28% from 2017 due to the appeal of providing faster, less expensive care. So it stands to reason your organization may be considering it as an option for 2019 or are offering some form of telemedicine benefits already.
Many advantages may come to both employers and employees from access to telemedicine since it allows both parties to save time and to manage their health care dollars better. However, adding telehealth benefits to a group health plan brings some compliance considerations. None are insurmountable, but here are some issues that any company that offers, or is considering offering, telemedicine services as part of their employee benefit arrangements should consider.
ERISA—Since telemedicine programs provide participants with access to medical care services, they fall under the scope of Title One of the Employee Retirement Income Services Act (ERISA). Therefore compliance, including plan documents and 5500 reporting, is required unless another exception to ERISA or its requirements applies. If telehealth benefits are directly part of the major medical plan, then ERISA compliance flows through that plan, and the group plan sponsor should outline any applicable telemedicine benefits in the medical plan documents. If a company offers telemedicine services as a standalone benefit, then it can be wrapped with the major medical plan in a wrap document and any applicable 5500 reporting can be done together. Alternatively, an employer plan can prepare a separate summary plan description for the telemedicine program and handle 5500 reporting separately, if there are enough participants to require 5500 reporting.
HIPAA/HITECH—Any telemedicine program offered by an employer will be considered a covered entity bound to follow the Health Insurance Portability and Accountability Act (HIPAA) privacy regulations and the related Health Information Technology for Economic and Clinical Health (HITECH) data security requirements. Employers should verify that vendor contracts include compliance provisions to protect both their plan and its participants, and they should also make sure that business associate agreements are in place.
COBRA—If an employer offers telemedicine as a standalone benefit, then it comes with its own Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requirements and compliance responsibilities. The scope of potential COBRA beneficiaries can be broader than with the major medical plan, since more people may have access to and then take up the health care services offered by a separate telehealth program. If the group medical coverage includes telemedicine services, then COBRA compliance would flow through the overall group plan.
Health Savings Accounts–Employers that offer both telemedicine benefits and access to qualified high deductible health plans (HDHPs) and health savings accounts (HSAs) have to be very careful about how they design their plans. These groups need to be sure that they do not inadvertently disqualify their employees from HSA eligibility by offering free or discounted telemedicine benefits.
Federal law governing HSAs specifies that people can only contribute to these accounts if they are not covered by any “disqualifying coverage,” which includes any medical benefits that are not subject to their HDHP deductible unless those benefits fall into one of the law’s permissible exceptions. Coverage that is not subject to HIPAA, also known as “excepted benefit coverage” like stand-alone vision and dental plans or voluntary indemnity benefits and benefits that fall within a set definition of preventive care are exempt from the deductible requirement. However, in most cases, telemedicine benefits most likely exceed the bounds of these exceptions, particularly if the program includes primary or specialty care services and allows providers to provide patients with prescriptions electronically. If this is the case, then the group plan has to coordinate its telemedicine program with its qualified HDHP offering carefully. The employer can do this by making sure that eligible employees pay fair market value for telemedicine services until they meet the terms of their HDHP deductible.
Federal legislation is pending to eliminate the conflict between HSA eligibility and telemedicine services, but it has not passed yet. Until it becomes law, employers have to be careful about how they structure the interplay between these two popular benefits.
If your company is interested in more information about telehealth services and how they can benefit both your health plan and your employees, or if you need help with any telemedicine compliance concerns, please contact your Kistler Tiffany Benefits Consultant.