Business Group Helps Secure 2-year Telehealth Extension for HDHPs in 2023 Omnibus Spending Package

After months of vigorous engagement, Congress passed an end-of-year federal government spending package that permits employers to continue to provide pre-deductible telehealth coverage in a high-deductible health plan (HDHP) for 2023 and 2024. Employers should also note new accommodation requirements related to pregnancies and nursing mothers, along with potential cost-shifting given certain Medicare reimbursement changes.

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January 05, 2023

On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023 (CAA ’23) with sweeping spending authority for the federal government and many of its programs. For employer plan sponsors, CAA ’23 represents a strong interim 2-year victory in our efforts to permanently secure the ability of employer plans to provide low-cost and/or no cost telehealth services for individuals covered by HDHPs before the otherwise applicable minimum deductible is satisfied. Business Group on Health participated in dozens of congressional member and staff meetings throughout 2022, and especially following the midterm elections in November to help secure this extension and lay the foundation for permanency.

Most employer plan sponsors with calendar year plans made plan design decisions many months prior to the passage of CAA ‘23. Those who were optimistic about the prospects for the extension and included pre-deductible coverage in their 2023 plan designs are fortunate to be able to smoothly continue or resume offering telehealth before the deductible. Others that were more cautious given the government’s slow action may wish to consult legal counsel about real-time or midyear plan changes to take advantage of the extension for 2023, but should have ample time to expand coverage for 2024.

For those interested in revisions, as is generally the case with plan design changes, employers will need to ensure all appropriate elements are accounted for, potentially including participant notices and disclosures, plan amendments, re-rating/pricing, carrier/TPA and reinsurance carrier impacts, and other requirements. Employers with non-calendar year plans should consult with counsel regarding options for including or continuing such coverage in 2023 and beyond.

Late in the Senate’s legislative process on December 22, 2022, two spending bill amendments related to support for pregnancy and nursing mothers were proposed and approved for inclusion in CAA ‘23.

The Pregnant Workers Fairness Act (PWFA) generally provides that employers with 15 or more employees provide “reasonable accommodations” to qualified employees with pregnancy, childbirth, or related medical conditions unless doing so would be an undue hardship for the employer. Additionally, the law prohibits denial of employment opportunities if reasonable accommodations can be provided and may impact employer paid or unpaid leave policies. PWFA will be effective on July 27, 2023 (180 days following enactment), but implementation and enforcement may be affected by EEOC rulemaking, which is required to be done by December 29, 2023 (1 year following enactment).

The Providing Urgent Maternal Protections for Nursing Mothers Act (“PUMP” for Nursing Mothers Act) expands on existing Fair Labor Standards Act (FLSA) requirements regarding reasonable breaktime (in some cases, paid) and private space for pumping breast milk. The act has a limited exception for small employers (fewer than 50 employees) and specific terms and carve-outs for rail carriers, air carriers, and motor coach services. PUMP Act’s expanded applicability provisions became effective upon its enactment with the spending package on December 29, 2022, while its expanded remedies take effect April 28, 2023 (120 days following enactment).

Finally, not directly applicable but of-note for employer health plans, CAA ’23 generally adopts a reduction to Medicare provider reimbursements of approximately 2% (rather than the 4.5% that was scheduled) and goes further in 2024 to 3.25%. Although this is less of a reduction to provider reimbursements, some providers may seek to recoup any revenue shortfalls from employer plans and other private payer arrangements. As we have noted in previous instances where public programs intend to limit or reduce provider or pharmaceutical payments to control the public program’s cost, such action may lead to “cost-shifting’ for which employer plan sponsors should be watchful and working with their service providers (e.g., carrier/TPA) to control and mitigate.

Business Group on Health will continue to engage with legislators on these issues will provide updates on future developments. For any questions or comments, please feel free to contact Garrett Hohimer, Vice President, Policy & Advocacy at hohimer@businessgrouphealth.org.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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