By: David LeFevre, ERISA Attorney + Chief ERISA Geek, ERISAfire Benefits Compliance Solutions

This post examines health savings account (HSA) and high-deductible health insurance (HDHP) implications of recent telemedicine developments. For other analyses, see this post on mid-year election change developments from the IRS, this post on a temporary relaxation of the grace period rules, this post on an increase in the maximum allowable carryover, this post on the repeal of the prescription requirement for over-the-counter items, and this post on cafeteria plan implications of DOL’s black hole ERISA deadline extension.

Current Rule

Under Code Section 223, a person is eligible to make contributions to an HSA only if the person is covered by a high-deductible health plan and has no disqualifying coverage. Any coverage of medical care or expenses inside the HDHP deductible for which the person does not pay (or pays less than fair market value) is disqualifying coverage (e.g. employer-paid telemedicine, general-purpose healthcare FSA coverage, on-site clinics with no cost-sharing, HRA coverage, coverage under a spouse’s employer’s plan or FSA, etc.).

New Rule

The recently enacted CARES Act amended Code Section 223 to deem telemedicine not disqualifying coverage for plan years beginning prior to December 31, 2021. For calendar year plans, this would apply to the 2020 and 2021 plan years. In addition, a HDHP will not fail to qualify as a HSA-qualified HDHP if it does not apply the deductible to telemedicine services. This statutory change applies to all telemedicine, not just COVID-19-related services.

Plan Amendment Requirements

Insofar as an individual receives telemedicine services outside of a HDHP, he/she will remain HSA-eligible by mere operation of law without need for any cafeteria plan amendment. However, adding telemedicine services to a HDHP that are provided without cost-sharing and before meeting the plan’s deductible is a plan design change to the HDHP that will require an amendment to the insurance policy or self-insured summary plan description.


About ERISAfire

ERISAfire LLC is an employee benefits compliance services firm, specializing in health and welfare benefits. ERISAfire has reimagined benefits compliance to help agencies and employers manage compliance risks and make the process easier. By leveraging custom-built technology to automate transactional tasks and provide a hyper-customized compliance calendar, its ERISA geeks can focus on complex analysis and experienced ERISA attorneys can scrutinize even the most mundane compliance tasks. Learn more at

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