Year-End Appropriations Legislation Contains Group Health Plan Provisions

Congress has passed, and the President has signed, the Consolidated Appropriations Act, 2023 (CAA, 2023), containing provisions that impact both retirement and group health plan sponsors and advisors. Here are highlights of the provisions affecting group health plans:

• Telehealth/HDHPs. Tax-advantaged contributions generally cannot be made to an HSA unless the account holder is covered by an HDHP and does not have disqualifying non-HDHP coverage. Congress created exceptions to those rules to facilitate the use of telehealth during the COVID pandemic, but the exceptions applied only to plan years beginning on or before December 31, 2021 (see our Checkpoint article), and for the last nine months of 2022 without regard to plan year (see our Checkpoint article). The legislation extends the exceptions by providing that telehealth and other remote care services will be considered disregarded coverage—and thus will not cause a loss of HSA eligibility—during plan years beginning after December 31, 2022, and before January 1, 2025. In addition, HDHPs may provide coverage for telehealth and other remote care services during those plan years before the minimum deductible is satisfied without losing their HDHP status. [EBIA Comment: It seems that non-calendar-year HDHPs will have a gap between the end of 2022 and the beginning of the 2023 plan year during which the relief does not apply. However, individuals covered under these plans may be able to use the full contribution rule (sometimes referred to as the “last-month rule” or the “no-proration rule”), which allows a full year’s worth of HSA contributions to be made by someone who is HSA-eligible for only a portion of the year.]
• Mental Health Parity. The legislation provides funding to assist states in their enforcement of the CAA, 2021 requirement that health plans and insurers prepare comparative analyses of any nonquantitative treatment limitations on mental health or substance use disorder coverage (see our Checkpoint article). The legislation also eliminates the right of self-insured non-federal government health plans to opt out of Mental Health Parity and Addiction Equity Act (MHPAEA) compliance (see our Checkpoint article). Effective immediately, no such new elections may be made, and elections expiring 180 days or more after December 29, 2022, may not be renewed. [EBIA Comment: Provisions that would have imposed civil monetary penalties for violations of the MHPAEA did not make it into the final bill but may resurface in future legislation.]

EBIA Comment: Much attention has been focused on the legislation’s retirement plan provisions (see our Checkpoint article), but group health plan sponsors and advisors should take note of these applicable provisions and be on the lookout for further developments in 2023. For more information, see EBIA’s Consumer-Driven Health Care manual at Sections X.I (“Telehealth and Other Remote Care Services”), XI.G.8 (“Certain Telehealth and Other Remote Care Services Will Not Prevent HSA Eligibility”), and XII.B.2 (“Full-Contribution Rule for Midyear HDHP Enrollees”), and EBIA’s Group Health Plan Mandates manual at Sections IV.F.1.a (“Opt-Out Election for Self-Insured State and Local Government Plans”), IX.A (“What Is Mental Health Parity and Who Must Comply?”), and IX.H.1 (“NQTL Comparative Analysis”).

Contributing Editors: EBIA Staff.