Current Limitations on Virtual Care in the Employee Benefits Market
With the COVID National and Public Emergencies periods behind us, many employees may soon lose access to popular virtual care benefits they grew to rely on. The limited relief offered during the pandemic, which enabled employers to offer stand alone telehealth to employees not enrolled in the medical plan, is no longer available. This means the ACA’s market reforms apply to all plans that offer ‘health care’, and unless these virtual care services can satisfy the myriad of mandates*, they can only be offered as a component of the underlying medical plan. Standalone telehealth and related plans previously available to all employees during the IRS relief during the pandemic, not just those enrolled in the employer’s medical plan, are no longer permitted.
Congress is considering a bill** called the ‘Telehealth Benefit Expansion for Workers Act’ that would enable employers to offer standalone virtual care benefits to all employees, regardless of the eligibility for, or enrollment in the major medical plan. The ability to offer telehealth to employees who are not eligible for the medical plan aligns with the ACA’s goal of expanding access to care for everyone. The employer mandate would not be avoided, as full time employees are still required to receive an offer of affordable, minimum value, comprehensive coverage in order to prevent the 4980H employer penalties.
Excepted benefits are generally exempted from the ACA mandates, as they do not provide ‘significant benefits in the form of medical care’ within the meaning of the law. Examples include employee assistance programs (EAPs) that provide referrals or discounts. These benefits are permitted to be offered to all employees, outside of the medical plan, due to their excepted status. It is unclear if some virtual health benefits would qualify as ‘excepted’ under the strict reading of the law.
As we follow the progress of this bill in 2024, employers that wish to pursue virtual care benefits outside of their medical plan can partner with their benefits advisors and counsel to analyze specific program components and vendor positions regarding the applicable law.
* The ACA requires plans to comply with certain requirements (such as no annual or lifetime limits on essential benefits, no exclusions for preexisting conditions, no cost preventive care), to satisfy the 4980H ‘employer mandate’, as well as to avoid penalties under 4980D. Plans offered outside of the medical plan cannot meet these requirements on their own, and therefore can only be offered as an integrated component of the underlying medical plan.
** In February 2023, this bill was supported by 3 House committees: Energy and Commerce; Education and the Workforce; Ways and Means.