Is our telemedicine program subject to ERISA, COBRA or PPACA?
Telemedicine programs are just another medium for an employee to visit with the doctor (or other medical professional) and receive a medical diagnosis or advice over the phone or Internet. Generally speaking, telemedicine programs provide medical care. Medical care is generally defined as the diagnosis, cure, mitigation, treatment or prevention of disease for the purpose of affecting any structure or function of the body. That said, employers should assume that a telemedicine program by itself is likely subject to ERISA, COBRA and PPACA, since the plan would most likely be considered as providing medical care. Of course, the specific benefits offered under the plan would need to be reviewed carefully to know for sure.
First, if the telemedicine program is offered in conjunction with the group health plan, then the telemedicine program, by virtue of its bundled association with the major medical plan, would be subject to ERISA, COBRA and PPACA. However, compliance with those laws would happen through the group health plan. To clarify, assuming the group health plan is otherwise in compliance with those laws, the telemedicine program would also be in compliance with those laws. To determine if the plans are bundled, the plan documents for both the major medical plan and the telemedicine program should be reviewed.
On the other hand, once a telemedicine program is separated, or offered as a standalone benefit to employees – meaning that employees who aren’t enrolled in the group health plan are still eligible to participate in the telemedicine program – it's generally considered its own separate plan for compliance purposes. And as explained more below, most standalone telemedicine programs won’t satisfy PPACA provisions and will have ERISA and COBRA compliance to deal with as well. Remember that when a telemedicine program is looked at on its own to determine if ERISA, COBRA and PPACA apply, the focus is on whether the telemedicine program is providing medical care.
With regard to ERISA, a group health plan subject to ERISA is defined as a plan, fund or program that’s established or maintained by an employer for the purpose of providing medical, surgical or hospital care or benefits to participants and beneficiaries. The analysis comes down to whether the plan provides medical care. While telemedicine programs may take many forms, almost all of them give employees access to a licensed health provider who provides a diagnosis and prescribes treatment relating to the employee’s medical condition. Since the definitions of “group health plan” and “medical care” are quite broad, most telemedicine programs would be considered as providing medical care and would therefore be subject to ERISA. Thus, unless another exception applies, a telemedicine program would be subject to ERISA’s requirements, including the written plan document, SPD and Form 5500 requirements.
Some have argued that telemedicine is different. The DOL has addressed similar situations (e.g., through wellness programs and employee assistance programs [EAPs]) where there were nonconventional mediums for visiting with a doctor, and the DOL came out on the side that the arrangement was providing medical care. So, where telemedicine is putting an individual in touch with a medical professional – whether that's by phone, Skype, Internet chat or whatever other means of technology – and the professional is providing advice (e.g., diagnosing, treating, advising, etc.), it would be difficult to argue that the arrangement wasn't providing medical care. That would lead to the conclusion that ERISA applies.
Again, if the telemedicine program is offered in conjunction with the medical plan, then the overall compliance of the medical plan would satisfy compliance for the telemedicine portion since the telemedicine is incorporated into the group health plan itself. The telemedicine benefit would need to be described in the plan documents and SPD as an available option for obtaining health care under the plan.
If ERISA applies, that generally means COBRA would apply. The definition of “group health plan” under COBRA is a plan maintained by an employer to provide health care to employees and their families. “Health care” for this purpose includes the diagnosis, cure, mitigation, treatment or prevention of disease, and any other undertaking for the purpose of affecting any structure or function of the body. Thus, for the same reasons that ERISA applies, COBRA would apply. Further, COBRA applies anytime coverage under a group health plan wouldn’t be available to the individual at the same cost but for the individual’s employment with the employer.
To clarify, the definition of “health care” is broad enough to include a telemedicine program that puts individuals in touch with a doctor or physician who will be diagnosing and treating individuals’ medical conditions. Thus, for a telemedicine program that's integrated with the group medical plan, COBRA compliance would be included or completed along with the medical plan, and the telemedicine program would fall under that. If it's a standalone telemedicine program, though, it would have to comply with COBRA on its own.
If the program is considered subject to ERISA and COBRA, then the program is likely subject to PPACA as well. The general rule is that PPACA would apply to the program since it's a group health plan. The question is often asked whether the telemedicine program can somehow be considered an “excepted benefit.”
There are four categories of excepted benefits, but only one that a telemedicine program might fall into. That’s the “certain supplemental insurance coverage” category, which pertains to certain types of plans that supplement group coverage. One of the requirements to fall into that category is that the plan must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles.
The problem for a telemedicine program is that such programs usually don’t fill gaps in the coverage and don’t provide additional compensation or benefits to assist with coinsurance or deductibles. So, most likely, the program isn’t filling any gaps and is simply providing a different method for accessing the same benefits (i.e., medical coverage).
Thus, the more logical, and cautious, approach would be to assume that the telemedicine program, on its own, is not an excepted benefit and is therefore subject to the PPACA. Like ERISA and COBRA, if the telemedicine program is integrated with the medical plan, compliance with PPACA is fairly straightforward. If the medical plan is in compliance, then the telemedicine program follows suit. If the telemedicine is standalone, then it's on its own to comply and will have difficulty with provisions such as the annual dollar limit prohibition.
If it's helpful as a parallel analysis, the government has issued guidance on whether an EAP would be considered an excepted benefit. According to that guidance, an EAP must meet four criteria in order to qualify as an excepted benefit:
- The program must not provide "significant" medical care (although the regulations don’t define significant).
- The EAP couldn’t be coordinated with benefits under another group health plan.
- Employee contributions/premiums couldn’t be required as a condition for EAP participation.
- No cost-sharing is permitted.
That first one is really the key. Regulations don’t define “significant,” but they do state that the amount, scope and duration of covered services are taken into account in determining whether significant medical care or treatment is provided. However, there is an example: where a plan provides only limited short-term outpatient counseling (without covering inpatient, residential or intensive outpatient care) without requiring prior authorization, this doesn’t provide significant medical care. There’s an argument that a telemedicine program meets that example because it's providing only limited short-term access to doctors (although there's a counter-argument that it's not short-term, since employees can use it as often as they want), it requires no prior authorization and it doesn’t otherwise cover inpatient/residential care.
Thus, for the same reasons that ERISA and COBRA would likely apply, most benefits from a telemedicine program would be considered medical care. The cautious approach would be to assume that the telemedicine program must comply with PPACA-related requirements.
The Bottom Line
In summary, employers considering telemedicine programs as an alternative or enhancement to their benefit offerings should work closely with their ShawHankins consultant or attorney in determining whether these various federal laws would apply to the program.