Innovations in healthcare greatly improve the lives of your employees and help your company contain business costs. “Telemedicine” was one of the more popular benefit trends of 2017, because it provides employees with easy and affordable access to medical care. However, employers are often unaware of the legal risks associated with introducing such programs into the workplace, and the prudent employer is well-served by taking a careful look before leaping.
What is “telemedicine”?
Telemedicine most often refers to delivery of medical services by healthcare professionals through technology, rather than in person. These services are often provided through secure, site-to-site electronic communications that include video-conferencing, emails, phone calls, mobile applications, electronic media record transfers, and even remote operation of medical devices. Telemedicine allows individuals to communicate with healthcare professionals on topics such as patient consultations, primary care diagnoses, prescription drug refills and behavioral health counseling.
Telemedicine also provides benefits for employers, including increased convenience, access to medical experts, and reduced benefit costs. A study by Towers Watson claims that U.S. companies could save as much as $6 billion in annual healthcare spending by adopting telemedicine programs. Telemedicine can also reduce worker time off for doctor visits because employees can see the doctor from home or work. This can be especially appealing to employers in rural settings, where specialty health care options may be limited (or not available) or are inconvenient to employers whose employees have irregular schedules.
Telemedicine can be offered in a variety of ways, but it’s most easily divided into two categories: provider-sponsored and employer/group health plan-sponsored. Provider-sponsored telemedicine takes place when an employee has an electronic “visit” with a provider, typically through provider-authorized software or apps. The group health plan receives a charge for the visit, which is paid in the same manner as an in-person visit. This type of arrangement poses little legal risk for employers.
Employer/group health plan-centered telemedicine takes place when a telemedicine provider supplies on-call physicians. In this scenario, employees talk with a doctor who is on retainer with the telemedicine provider. Many of these plans include a monthly maintenance fee that in turn results in free or reduced cost “visits.” This arrangement can be risky for employers.
Legal risks for employers
The most common legal issues that arise out of telemedicine services for employers are compliance with federal laws such as ERISA, COBRA and HIPAA, as well as state laws concerning medical licensure and practice, as well as informed consent. Employers offering access to a telemedicine program for their employees—regardless of group health plan enrollment status—may inadvertently create an ERISA group health plan.
If the program provides primary care or prescription drug services, it may also implicate separate group health plan issues under ERISA, COBRA, HIPAA, or other federal laws. If so, the program might be subject to further regulatory compliance. Moreover, telemedicine programs are subject to HIPAA’s privacy, security and breach notification requirements.
Each state has medical licensing laws that may preclude or restrict providers who are licensed in one state from delivering telemedicine services in another state. Some states may now or in the future also have laws restricting the scope of benefits that providers are permitted to deliver via telephone or Internet.
Additionally, the various protocols and requirements of “informed consent” by patients (before a provider is permitted to administer telemedicine services) must be thoroughly understood. At a minimum, such consent must be preceded by an explanation as to what telemedicine is, and lay out the expected benefits and possible risks associated with using telemedicine services.
Employers must also be careful to not disqualify employees from using their health savings accounts (HSA). Employers who adopt a telemedicine program alongside a high-deductible health plan (HDP) must be careful they don’t inadvertently disqualify their covered employees from HSA eligibility.
An HSA allows individuals covered under a high-deductible to defer compensation on a pre-tax basis for the purpose of paying eligible medical expenses. In addition, HSA participants must not be covered under any disqualifying coverages, which generally includes any health coverage that provides a benefit prior to meeting the HDHP deductible (unless one of the IRS’s limited exceptions apply).
A telemedicine benefit might conceivably count as disqualifying coverage if, for example, the employer pays a portion of the telemedicine consultation, or if the participant pays less than fair market value for the consultation before meeting an applicable HDHP deductible. A provider-sponsored program, or a telemedicine program requiring a separate charge for each “visit,” may mitigate or avoid this HSA risk.
Best Practices to Follow
Employers considering telemedicine programs should closely examine compliance requirements when designing and implementing such programs. The best way to minimize the risk of creating a separate group health plan—and potentially triggering additional compliance obligations under various laws—is by permitting only employees who are enrolled in a group health plan to use the telemedicine benefits. In this way, the telemedicine program can be integrated with the group health plan to meet federal requirements. As such, it must be available to qualified beneficiaries through COBRA as well.
Michael V. Abcarian is the managing partner in the Dallas office of Fisher Phillips, a national labor and employment law firm.