Assessing the ERISA Impact on a Telehealth Benefit

• Learn about each element of an ERISA welfare benefit plan as it relates to telehealth and whether the benefit would be subject to ERISA.
• Get information about the DOL safe harbor.

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 key definition of ERISA welfare benefit plan

The answer is generally yes. Typically, group health plans offer Telehealth, sometimes also referred to as telemedicine. ERISA does govern group health plans if sponsored by a private sector employer. What if you receive telehealth benefits separately from the employer’s group health plan? The benefit can still be subject to the law if 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. We might not consider an arrangement that provides “one-off” benefits and, thus, doesn’t require an “ongoing administrative scheme” as 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. We consider an arrangement exempt under this safe harbor if it meets the following requirements:

1. The employer makes no contributions.
2. Participation is completely voluntary.
3. 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.
4. 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. Fiducial can help you assess the costs of any benefits you offer or are considering, including the impact of ERISA compliance.

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