Telemedicine: Compliance Considerations

Telemedicine has the potential for explosive growth, as more employers are embracing the idea of offering the utmost in care convenience to their employees.

 

Employers sponsoring telemedicine benefits encounter compliance obligations similar to those they encounter with other employer-sponsored welfare benefits. Some compliance issues employers will want to consider, with the assistance of knowledgeable legal counsel, include the following.

 

While many states are loosening their restrictions on telemedicine, and even requiring insurers to pay for it, some states are headed in the opposite direction. For example, a legal scuffle continues in Texas, where the Texas Medical Board and Teladoc, a provider of telemedicine services, are at odds while a federal court examines the issues and determines whether a recent ruling by the Texas Medical Board to restrict the practice of telemedicine violates the law. Teladoc continues to provide its services in Texas while awaiting the outcome. Other states severely restrict or ban enhanced telemedicine practices like online chat. Employers should monitor any developments in the states where their employees live to determine whether the impact begins to spread beyond Texas.

 

ERISA establishes a compliance framework for employer-sponsored medical benefits. Among other things, ERISA dictates that these benefits must be set forth in a written plan document, that various disclosures must be made to participants, and that the employer files general information about the plan with the government.

 

When ERISA applies, we believe most employers will want to treat the telemedicine benefit as part of the employer’s larger health plan. Doing so will help the employer meet its ERISA requirements without creating additional documents, disclosures, and filings. This is especially true in the wake of federal health reform, as many standalone telemedicine plans would have a difficult time meeting certain reforms, such as the requirement to provide preventive benefits without cost sharing.

 

COBRA requires group health plans to provide participants and beneficiaries with the right to continue receiving benefits under the plan after certain triggering events, such as a termination of employment or a divorce, that cause the participant or beneficiary to lose eligibility. To the extent COBRA applies, employers will have to consider how to meet their COBRA obligations in light of the particular telemedicine benefit.

 

In addition to determining how much to charge for COBRA and communicating COBRA rights, employers might need to consider how to provide telemedicine access to COBRA beneficiaries. For example, if the telemedicine benefit is obtained only through a kiosk available at the employee’s work site, the employer will want to consider policies for allowing access to the kiosk for COBRA beneficiaries, such as former employees, former spouses of eligible employees, and certain children of employees or former employees.

 

The Health Insurance Portability and Accountability Act (HIPAA) provides a framework for keeping protected health information private and secure. Generally, insurers handle HIPAA compliance issues for insured employer-sponsored health benefits. Often, however, telemedicine benefits subject to HIPAA are not insured, which means the employer or plan sponsor must, on behalf of the self-insured program, ensure the HIPAA requirements are met. This includes disclosures to participants and written privacy notices.

 

Many individuals who participate in a high deductible health plan (HDHP) also have the option to make pretax contributions to a health savings account (HSA). Funds in the HSA can then be used to pay for medical expenses. To be able to make HSA contributions, however, the health plan member cannot have any disqualifying coverage. Disqualifying coverage includes any health coverage that provides a benefit (other than preventive care) before the HDHP deductible is met. A telemedicine benefit could count as disqualifying coverage, for example, if the employer pays a portion of the cost of a telemedicine consultation, or the participant pays less than fair market value for access to the consultation, before meeting the HDHP deductible. As such, employers that sponsor HDHPs will want to consider the implications for HSAs if they decide to provide a telemedicine benefit.

 

The specific structure of the telemedicine benefit can create some unique challenges. None of these issues is insurmountable by any means, but the employer should be aware of them. The bottom line for employers who are considering adding a telemedicine option is that careful consideration of the risks and benefits is important.