In today’s electronic age, telemedicine is another way for busy consumers to reach out for health care consultation when illness or injury occurs. In addition, smart consumers are looking for low-cost healthcare options to mitigate the rising costs of healthcare.
There are different types of telemedicine services, including: 1) a general practitioner who may consult with their existing patients via a phone call or video conference and 2) a service engaged to provide telephone consultations by qualified providers without having an initial face to face visit. This brief will focus on the second type, which is a common option offered by employers to their employees. As with most things there are pros and cons to offering telemedicine which are addressed below.
Cost Efficient. The cost for a telephone consultation is approximately one-third the cost of a standard physician’s visit. Each telemedicine consultation typically costs between $35 to $45;however in many instances the consultations are subsidized by employers resulting in the cost being substantially lower for participants. The lower cost makes these types of programs even more appealing.
Convenience. There is no time wasted going to the physician’s office. In some cases it may take a few days to get an appointment.The total time for a physician’s visit once it is scheduled may take several hours due to lost time from work, drive time to and from the physician’s office, as well as time sitting in the waiting room.With telemedicine, once a telephone consultation is requested, a physician will typically return the call within one hour.
Access to Care. Most telemedicine companies have physicians licensed in all states and the U.S. territories. Therefore, access to a qualified physician is readily available even while traveling for business or on vacation. In addition, rural areas have a shortage of primary care physicians.Telemedicine gives patients living in these areas the ability to connect with a physician regardless of location.
Health FSAs. A health Flexible Spending Account(FSA) may reimburse qualified medical expenses.Copays or cost-sharing for telemedicine visits are qualified medical expenses and may qualify for health FSA reimbursement when they are not reimbursed by the group health plan.
HSA Eligibility. Participants contributing to a Health Savings Account (HSA) must be on an HSA qualified High Deductible Health Plan (HDHP) that provides significant benefits, without other non-permitted coverage (general purpose health flexible spending arrangement (FSA), health reimbursement account (HRA), or other non-HDHP group health plan coverage) that provides significant medical care. Due to the wide-range of conditions treated and the unlimited number of consultations, telemedicine may be considered significant medical care. A cautious approach would be for the employer to set fees for telemedicine consults at the fair market value and not subsidize coverage to employees enrolled in the HDHP, thus maintaining the employees’ HSA eligibility.
Health Plan Compliance. In most cases, telemedicine programs will be group health plans subject to ERISA, HIPAA, and COBRA.
ERISA. For purposes of ERISA, if there is a plan, fund or program which is established or maintained by an employer to provide specific benefits (medical, surgical, hospital care, accident, disability, death, unemployment, etc.) to participants, it is an employee welfare plan subject to ERISA. If the telemedicine program is subject to ERISA, then all ERISA requirements are applicable. This includes ERISA’s written plan document requirement, summary plan descriptions and summary material modifications. The plan would also be subject to reporting requirements such as the Form 5500 filing.
Technology Limitations. Video consultations may be an issue in rural areas or other locations with limited or non-existent broadband connections. State laws should also be verified, as some states do not allow for video consultations.
Care Continuity. When only using telephone consultations, an individual may not choose a primary care physician, there by resulting in lost continuity of care because one specific physician is not monitoring the individual’s health and medical history.
Insurance Coverage. While telemedicine consultations may be provided for or in conjunction with an insurance plan, the services are generally not covered under the insurance plan if part of a separate program. This means the participant does not receive credit for deductible or out-of-pocket expenses when consultations occur.
Telemedicine is not a new concept; however, it is gaining traction with advancements in technology and quickly becoming a popular option to providing healthcare and mitigating costs. Employers should be aware of the pros and cons to these types of programs so they are administered within the applicable legal guidelines.