Background
Section 3701 of the CARES Act created a temporary safe harbor that allowed employers and health plans to provide pre-deductible coverage of telehealth services for individuals with a high deductible health plan coupled with a health savings account (HDHP-HSA). The safe harbor allowed individuals with these plans to access telehealth services before their annual deductible was met, ensuring that employers and plans could support patients that were leveraging virtual care to access a range of critical health care services during the pandemic. The Alliance catalyzed policy changes to allow for this HDHP telehealth flexibility at the start of the COVID-19 pandemic in March 2020, and was successful in expanding this important virtual care for the 32 million individuals with these plans through December 31, 2024.
This provision has increased health care access for many individuals that otherwise would have avoided care due to out-of-pocket costs. Unfortunately, Congress did not anticipate that the COVID-19 public health emergency would last this long, and only provided for this access until December 31, 2021. While Congress renewed this flexibility for telehealth services from March 31, 2022 – January 1, 2023 through the Consolidated Appropriations Act, 2022, the lapse that occurred between January 1, 2022 – March 31, 2022 when the CARES Act flexibility expired and these services were therefore not covered led to confusion and uncertainty for patients and employers.
As a result of our ongoing advocacy on this issue, Congress included a two-year extension of the HDHP telehealth safe harbor in the Consolidated Appropriations Act, 2023, which expired December 31, 2024. Unfortunately, the provisions ended December 31, 2024 as Congress was unable to include in its end of year funding package.
After several years of the Alliance’s advocacy, including well before this policy was unlocked during the pandemic, over 32 million individuals will be able to permanently receive pre-deductible coverage of telehealth services. On July 3, 2025, Congress passed H.R. 1, which includes Section 71306, allowing for permanent extension of this important telehealth policy. Additionally, the extension covers the lapse that occurred starting December 31, 2024.
Please see below for a resource document from the Alliance for Connected Care on what this means for employers, plans, and employees. For any questions, please reach out to rikki.cheung@connectwithcare.org.
Advocacy Highlights
Alliance Coleads Letter in Support of Telehealth Commercial Market
The Alliance for Connected Care joined other leading digital health associations to support Sec. 71306 of the Senate amendment to H.R. 1, which allows for permanent extension of safe harbor for absence of deductible for telehealth services, and urge inclusion in the final bill. Full comments can be found here.
Alliance Urges Senate Finance Committee on Commercial Market Telehealth
The Alliance for Connected Care sent a letter to the Senate Finance Committee Republicans, urging for reconsideration the omission of commercial market telehealth flexibility in the reconciliation package. Employers and health plans need certainty around the availability of these services in order to finalize benefits for the 2026 plan year. Specifically, Senator Daines’ Telehealth Expansion Act of 2025 would restore the safe harbor that allowed employers and health plans to provide pre-deductible coverage of telehealth services for individuals with a high-deductible health plan coupled with a health savings account (HDHP-HSA).
On November 22, 2024, Reps. Lee (D-NV), Steel (R-CA) and Schneider (D-IL) led a bipartisan group of 39 Congressional Members in a letter asking Congressional leadership to pass critical telehealth flexibilities legislation before December 31, 2024. The Alliance for Connected Care worked closely with the Congressional offices on this advocacy effort. The letter called on Congress to legislation that would allow permanently allow health plans and employers to provide pre-deductible coverage of telehealth services for individuals with a high deductible health plan coupled with a health savings account (HDHP-HSA). This provision was included in both the Primary and Virtual Care Affordability Act (H.R. 7681) and the Telehealth Expansion Act (S. 1001/H.R. 1843).
Alliance Joins More than 200 Organizations in a Letter Supporting the Telehealth Expansion Act
The Alliance for Connected Care joined 228 organizations in a letter urging Congressional leaders to pass the Telehealth Expansion Act of 2023 (H.R. 1843/S. 1001). The Telehealth Expansion Act of 2023 is a bipartisan, bicameral bill that would make permanent the pandemic-era policy that enabled employers to provide telehealth services on a pre-deductible basis to individuals with high-deductible health plans coupled with a health savings account (HDHP-HSA).
Alliance Leads More than 185 Organizations in a Letter Supporting the Telehealth Expansion Act
The Alliance for Connected Care led 188 organizations in a letter urging House Ways & Means Committee leaders to advance the Telehealth Expansion Act of 2023 (H.R. 1843/S. 1001) to the full House of Representatives for consideration. The Telehealth Expansion Act of 2023 is a bipartisan, bicameral bill that would make permanent the pandemic-era policy that enabled employers to provide telehealth services on a pre-deductible basis to individuals with high-deductible health plans coupled with a health savings account (HDHP-HSA). The letter supported a successful effort in advocating for the favorable reporting of this bill out of the House Ways & Means Committee during a markup of the bill on June 7, 2023. See the Alliance statement here.
Alliance Statement on the Telehealth Expansion Act of 2023
The Alliance for Connected Care is pleased to support the Telehealth Expansion Act of 2023 (H.R. 1843/S. 1001) and applauds Representatives Steel (R-CA), Lee (D-NV), Smith (R-NE), and Schneider (D-IL) and Senators Daines (R-MT) and Cortez Masto (D-NV) for their leadership in introducing this bipartisan, bicameral legislation. “Millions of Americans spend thousands of dollars of their own money on medical services before their insurance kicks in. Even with the benefit of tax exclusion, high deductibles are a struggle for many individuals and families. Why wouldn’t we want to allow employers to cover telehealth, including primary care and mental health services, immediately regardless of deductible? It’s access to health care, plain and simple,” said Krista Drobac, Executive Director of the Alliance for Connected Care. “The Alliance for Connected Care is proud to support the Telehealth Expansion Act, which will ensure individuals with HDHP-HSAs continue to have ready access to virtual-care services on a permanent basis.”
Alliance Applauds Inclusion of Major Telehealth Provisions in FY2023 Omnibus Appropriations Bill
Congress included a two-year extension of the HDHP telehealth safe harbor in the Consolidated Appropriations Act, 2023, ensuring individuals with high-deductible health plans coupled with a health savings account (HDHP-HSA) can continue to access telehealth services on a pre-deductible basis through December 31, 2024. The inclusion of a two-year extension of Medicare telehealth and commercial market telehealth flexibilities will make a huge difference to so many Americans. The Alliance for Connected Care has been calling for predictability for patients and clinicians while continuing to work toward permanent telehealth authorization. This gives us both.
On December 12, 2022, Reps. Schneider (D-IL), Steel (R-CA) and Lee (D-NV) led a bipartisan group of 30 House Members in a letter asking House leadership to extend critical telehealth flexibilities in the year-end appropriations package. The Alliance for Connected Care worked closely with the Congressional offices on this advocacy effort. The letter called on Congress to include the extension of the flexibility that allowed health plans and employers to provide pre-deductible coverage of telehealth services for individuals with a high deductible health plan coupled with a health savings account (HDHP-HSA). This provision was included in both the Primary and Virtual Care Affordability Act (H.R. 5541) and the Telehealth Expansion Act (H.R. 5981) For additional coverage, see PoliticoPro, mHealth Intelligence and Inside Telehealth.
On Friday, January 21, more than 125 organizations sent a letter to Congress to urge policymakers to reinstate the telehealth safe harbor enacted in the CARES Act that enabled employers and health plans to provide pre-deductible coverage for telehealth services for individuals with high-deductible health plans coupled with Health Savings Accounts (HDHP-HSAs). The letter was convened by the Alliance for Connected Care and includes a diverse mix of signers including patient groups, clinician organizations, employer coalitions, and digital health platforms. To read the full letter, click here.
Fact Sheet
This document presents data on the use of the virtual care flexibility created in the CARES Act for individuals with HDHP-HSAs, and its impact on access to health care during the COVID-19 pandemic.
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Open in new tab HDHP Telehealth in the News
House Ways & Means Committee: Ways and Means Expands Health Benefit Options, Increases Flexibilities for Small Business Workers (6/8/23) – The House Ways & Means Committee held a markup and voted to advance the Telehealth Expansion Act of 2023 (H.R. 1843). The bill, which was introduced by Reps. Steel (R-CA), Lee (D-NV), Smith (R-NE), and Schneider (D-IL), would permanently allow pre-deductible coverage of telehealth services for high-deductible health plans. The Committee voted favorably to report the bill out of Committee by a vote of 30-12. A one-pager on the bill can be found here. The bill:
- Lowers health care costs for families by expanding pre-deductible telehealth flexibilities for businesses that offer high-deductible health plans.
- Makes it easier for Americans living in rural communities to talk to their doctor.
- 76 percent of employers want Congress to make this benefit permanent.
Additional coverage on this markup can be found at Axios, Politico Pro, and Inside Health Policy.
Sen. Daines: Daines, Cortez Masto Introduce Bipartisan Bill to Protect Americans’ Access to Telehealth Services (3/28/23) – Senator Steve Daines (R-MT) and Catherine Cortez Masto (D-NV) reintroduced a bipartisan bill that would make expanded access to telehealth services permanent. These services were used extensively during the pandemic and many Americans, especially those in rural areas, still depend on them to access care. “Millions of Americans spend thousands of dollars of their own money on medical services before their insurance kicks in. Even with the benefit of tax exclusion, high deductibles are a struggle for many individuals and families. Why wouldn’t we want to allow employers to cover telehealth, including primary care and mental health services, immediately regardless of deductible? It’s access to health care, plain and simple. The Alliance for Connected Care is proud to support the Telehealth Expansion Act, which will ensure individuals with HDHP-HSAs continue to have ready access to virtual-care services on a permanent basis.” – Krista Drobac, Executive Director, Alliance for Connected Care
Rep. Michelle Steel: Steel Introduces Bipartisan, Bicameral Expansions in Telehealth Coverage (3/28/23) – Reps. Steel (R-CA), Lee (D-NV), Smith (R-NE) and Schneider (D-IL) introduced the Telehealth Expansion Act of 2023 (H.R. 1843), which would make permanent a waiver created by the CARES Act to allow Americans with Health Savings Accounts (HSA) to access telehealth services without first having to meet their deductible. The Alliance for Connected Care is proud to support this bill.
Inside Health Policy: Stakeholders to Lawmakers: Reinstate CARES Act Telehealth Policy for HDHP-HSAs (1/13/22) – The Alliance for Connected Care and over 100 organizations sent a letter to key lawmakers asking them to reinstate the CARES Act policy changes that allowed Americans with HDHP-HSAs to receive pre-deductible telehealth services. This flexibility expired on December 31, 2021. This letter builds on the advocacy done by the Alliance and several other stakeholders to ensure this provision does not lapse, including supporting efforts by bipartisan, bicameral lawmakers to request that the IRS waive enforcement of current law until lawmakers can act on this issue in 2022.
Congress: Letter to Treasury on the HDHP-HSA Telehealth Safe Harbor (12/22/22) – Senators Cortez Masto (D-NV) and Daines (R-MT) and Representatives Steel (R-CA) and Lee (D-NV), the co-sponsors of the Telehealth Expansion Act in the Senate and House, sent a letter to the US Department of the Treasury on an IRS non-enforcement strategy for the CARES Act provision that enabled employers and insurers to provide pre-deductible coverage of telehealth services for individuals with HDHP-HSAs. This provision expired on December 31, 2021. These Members of Congress sent this letter to Secretary Yellen, as well as to the White House and HHS, urging the Treasury to issue guidance ensuring that Americans with an HDHP-HSA will not be faced with unexpected out-of-pocket costs for telehealth services after this provision expired to allow Congress to act on this provision early in 2022.
Inside Health Policy: IRS Pressed to Waive Enforcement Until Congress Extends HSA Telehealth Policy (12/22/22) – Several stakeholders have asked the IRS to waive enforcement of the CARES Act provision that enabled employers and health plans to provide pre-deductible coverage of telehealth services to individuals with high-deductible health plans coupled with a health savings account (HDHP-HSAs) before it expired on December 31. A letter from the Alliance to Fight for Health Care urged the IRS to hold on enforcement until Congress is able to act in 2022, given it was not included in the Medicare extenders bill enacted in December. The Alliance for Connected Care has also been active on advocating around this issue, with Executive Director Krista Drobac stating “We are hopeful that the IRS will recognize congressional intent to continue telehealth flexibilities and provide a temporary delay in enforcement of HSA policy.”
Inside Health Policy: Congress Poised to Let CARES Pre-Deductible Telehealth Provision Expire (12/8/22) – The House failed to include an extension of a provision enacted through the CARES Act that has allowed employers to provide coverage for telehealth services pre-deductible for individuals with HDHP-HSAs in its newly passed provider relief measure. This provision is set to expire on December 31, 2021, as it is not tied to the public health emergency unlike other telehealth flexibilities. This policy was on the short list of provisions that the House and Senate was considering for this bill, but fell out during negotiations with the Ways & Means Committee due to lack of Democratic support. This policy has been widely adopted and is currently used by about 40 percent of employers, and groups including the Alliance for Connected Care continue to advocate for the policy’s extension.
Representative Steel: What They’re Saying: Healthcare Community Applauds Telehealth Expansion Act (11/30/22) – Reps. Steel (R-CA) and Lee (D-NV) recently introduced the Telehealth Expansion Act (H.R. 5981), which would make permanent a CARES Act provision that allowed pre-deductible coverage of telehealth services for individuals with HDHP-HSAs. This provision is set to expire on December 31, 2021 if Congress does not take action. Several groups were quoted in support of this legislation, including Alliance for Connected Care Executive Director Krista Drobac: “During the COVID-19 pandemic, Congress enabled employers to offer pre-deductible coverage for telehealth services, expanding access to care and reducing out-of-pocket costs for millions of Americans. The bipartisan Telehealth Expansion Act of 2021 will ensure individuals with HDHP-HSAs continue to have ready access to virtual-care services while remaining eligible to make and receive contributions to an HSA.”