The popularity of telehealth grew exponentially when the COVID-19 pandemic hit in the spring of 2020. Many people have now returned to in-person appointments with their physicians, though virtual visits remain a convenient option under some circumstances.
The situation has motivated many employers to formally offer telehealth as an employee benefit. As a result, a common question arises: Is such a benefit subject to the Employee Retirement Income Security Act (ERISA)?
The answer is generally yes. Telehealth, sometimes also referred to as telemedicine, is typically offered under a group health plan — which is indeed governed by ERISA if sponsored by a private sector employer. Even if telehealth is offered separately from the employer’s group health plan, the benefit can still be subject to the law if it’s considered all or part of an ERISA welfare benefit plan.
In general, an ERISA welfare benefit plan is a plan, fund or program established or maintained by an employer to provide employees with ERISA-listed benefits. Let’s break down each element as it relates to telehealth and whether the benefit would be subject to ERISA:
A plan, fund or program. An arrangement that provides “one-off” benefits and, thus, doesn’t require an “ongoing administrative scheme” might not be considered a plan, fund or program subject to ERISA. But it’s difficult to imagine a telehealth benefit that wouldn’t involve ongoing administration, so this element would likely be met.
Established or maintained by an employer for its employees. If an employer explicitly offers telehealth as a health care benefit, this element would probably be met.
Provides ERISA-listed benefits. Medical benefits are among those listed in ERISA. As telehealth is clearly medical care, this element would likely be met.
DOL safe harbor
Under a regulatory safe harbor issued by the U.S. Department of Labor, certain group insurance arrangements are exempt from ERISA even if they provide ERISA-listed benefits. An arrangement is exempt under this safe harbor if the following requirements are met:
- The employer makes no contributions.
- Participation is completely voluntary.
- The employer doesn’t endorse the arrangement and its involvement is limited to permitting the insurer to publicize the program and collecting and remitting insurance premiums.
- The employer receives no consideration for collecting and remitting premiums other than reasonable compensation.
A voluntary employee-pay-all telehealth benefit offered by a third party, with employer involvement limited to the permitted activities set forth in the safe harbor, probably wouldn’t be an ERISA plan.
Rules to follow
If your organization’s telehealth benefit does fall under the purview of ERISA, which is likely the case, you’ll need to ensure the benefit complies with the applicable rules. These include having a plan administrator, following claims and appeals procedures, and providing a summary plan description. Our firm can help you assess the costs of any benefits you offer or are considering, including the impact of ERISA compliance.
We highly recommend you confer with your Miller Kaplan advisor to understand your specific situation and how this may impact you.