QUESTION: We are considering offering a stand-alone telehealth benefit to our employees. Will this arrangement be an ERISA plan?
ANSWER: Telehealth benefits (also referred to as telemedicine benefits) are often offered under an employer’s group health plan, which is governed by ERISA if sponsored by a private sector employer. Even if telehealth benefits are offered separately from the employer’s group health plan, the benefits are likely subject to ERISA.
In general, an arrangement is an ERISA welfare benefit plan if it is a plan, fund, or program established or maintained by an employer to provide its employees with ERISA-listed benefits. Here is a summary of each element:
Plan, fund, or program. An arrangement that provides “one-off” benefits and thus does not require an “ongoing administrative scheme” might not be considered a plan, fund, or program subject to ERISA. It is difficult to imagine a telehealth benefit that would not involve ongoing administration, so this element will likely be met.
Established or maintained by an employer for its employees. You have indicated that this benefit would be offered by the company, so this element will be met.
Providing ERISA-listed benefits. Medical benefits are among the benefits listed in ERISA, and telehealth is clearly medical care, so this element will be met.
Under a DOL regulatory safe harbor, certain group insurance arrangements are exempt from ERISA even if they provide ERISA-listed benefits. An arrangement is exempt under this safe harbor if all of the following requirements are met: (1) the employer makes no contributions; (2) participation is completely voluntary; (3) the employer does not endorse the arrangement and the employer’s involvement is limited to permitting the insurer to publicize the program and to collecting and remitting premiums to the insurer; and (4) the employer receives no consideration for collecting and remitting premiums, other than reasonable compensation. A voluntary employee-pay-all telehealth benefit offered by a third party, with employer involvement limited to the permitted activities set forth in the safe harbor, would not be an ERISA plan.
As an ERISA plan, your telehealth benefits would have to comply with the generally applicable rules, such as having a plan administrator, claims and appeals procedures, and a summary plan description.
Telehealth benefits can raise other legal issues aside from ERISA’s applicability. As a group health plan, a stand-alone telehealth plan generally would have to comply with various coverage mandates under the ACA and other laws, such as first-dollar coverage of preventive care, not imposing annual or lifetime dollar limits on essential health benefits, mental health parity, and not including preexisting condition exclusions. Note that telehealth-only plans are temporarily exempt from certain of these mandates for plan years beginning before the end of the COVID-19 emergency. This relief is limited to telehealth-only arrangements sponsored by a large employer (generally, one with at least 51 employees) and offered only to employees or dependents who are not eligible for coverage under any other group health plan offered by that employer. Employers offering telehealth must also consider COBRA and HIPAA compliance.
Moreover, telehealth coverage may affect an individual’s ability to contribute to a health savings account (HSA), although temporary relief provides that telehealth and other remote care services provided on or after January 1, 2020, will qualify as disregarded coverage (i.e., it will not cause a loss of HSA eligibility) for plan years beginning on or before December 31, 2021, and for months beginning after March 31, 2022, and before January 1, 2023.
For more information, see EBIA’s ERISA Compliance manual at Sections VI (“What Workplace Fringe Benefits Are Subject to ERISA?”) and VII.C (“Detailed Review of Voluntary Plan Safe Harbor”). See also EBIA’s Self-Insured Health Plans manual at Section XI.E.5 (“Telemedicine”), EBIA’s Consumer-Driven Health Care manual at Section XI.G.7 (“Certain Telehealth and Other Remote Care Services Will Not Prevent HSA Eligibility”), and EBIA’s HIPAA Portability, Privacy & Security manual at Section XXIII.O (“HIPAA Privacy and Security Issues for Health Plans Incorporating Telemedicine”).
Contributing Editors: EBIA Staff.