Telemedicine—Impact on HSA Eligibility

Telemedicine has become a popular method of providing medical services. Some employers offer telemedicine benefits that allow employees to interact with health care professionals via phone, video chat, email or text for diagnosis, consultation and treatment. Employers that offer high deductible health plans (HDHPs) compatible with health savings accounts (HSAs) should consider how a telemedicine benefit may impact participants’ HSA eligibility.

The IRS has not specifically addressed the impact of telemedicine on HSA eligibility. However, the general rules for HSA contributions strictly limit the types of health plan coverage that eligible individuals may have. Whether telemedicine is disqualifying coverage for HSA purposes depends on how the telemedicine benefit is structured. Employers that want to offer a telemedicine benefit while preserving HSA eligibility will need to make sure that the telemedicine benefit is designed in a way that is HSA–compatible.

UPDATE: In response to the COVID-19 pandemic, the CARES Act allowed HDHPs to cover telehealth and other remote care services before the plan’s deductible was met, without affecting the HDHP’s compatibility with HSAs. This rule took effect Jan. 1, 2020, and applied for plan years beginning on or before Dec. 31, 2021. A 2022 spending bill extended this flexibility from April 2022 through the end of 2022. Most recently, the Consolidated Appropriations Act, 2023 (CAA) extended this flexibility for plan years beginning after Dec. 31, 2022, and before Jan. 1, 2025.