Earlier this year, the Employee Retirement Income Security Act (ERISA) turned 50. If your organization has been administering employee benefit plans for any length of time, you’re likely well-acquainted with the law’s broad impact.
However, many employers still get caught off guard occasionally by the sheer scope of ERISA. For example, telehealth. Its use exploded during the pandemic and as expected, many people continue to value the convenience of telehealth visits with certain providers. If your benefits package includes coverage for it, don’t forget to stay apprised of the potential ERISA impact.
Essential Elements
Telehealth, sometimes called telemedicine, is typically offered under today’s group health insurance plans — which are 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.”
Generally, an ERISA welfare benefit plan is a plan, fund, or program established or maintained by an employer to offer employees ERISA-listed benefits. Here’s a breakdown of how each of these elements 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. This element would probably be met if an employer explicitly offers telehealth as a health care benefit.
Offering ERISA-Listed Benefits. Medical benefits are among those listed in ERISA. As telehealth is clearly medical care, this element would likely be met.
Requirements For Exemption
Under a regulatory safe harbor issued by the U.S. Department of Labor, some group insurance arrangements are exempt from ERISA even if they provide ERISA-listed benefits. An arrangement may be exempt if the following four safe-harbor 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 considered an ERISA plan. However, you’d still need to have a qualified benefits attorney review the details to be sure.
Regulatory Compliance
Whether your organization self-insures or works with a third-party insurer, you must be absolutely sure that all the benefits you offer comply with ERISA if required. As you can see, compliance requirements may apply to telehealth coverage. Contact us for help capturing and analyzing your total benefits costs, including the impact of complying with ERISA and other laws.