House committee approves bill to expand access to tax-free telehealth plans

BY: BEN LEONARD | 07/19/2023 11:58 AM EDT

The Energy and Commerce Committee advanced legislation largely on party lines Wednesday that would permanently allow employers to offer telehealth as a tax-free benefit separate from their group health insurance plans.

The legislation by Tim Walberg (R-Minn.) aims to encourage employers to offer some health coverage to workers not otherwise eligible for their companies’ insurance plans — such as part-time and seasonal workers — by permitting employers to offer telehealth plans that don’t meet minimum federal standards for comprehensive coverage.

“Telehealth offers an affordable and flexible option for health care,” Walberg said. “Allowing employers to offer this as a standalone benefit to those who do not currently have any benefits will undoubtedly increase access to care.”

Pandemic regulations had permitted companies to offer the plans tax-free, but those provisions expired along with the public health emergency in May.

Health Subcommittee Chair Brett Guthrie (R-Ky.) noted that the Affordable Care Act didn’t mandate coverage for part-time or seasonal workers, and argued that the legislation doesn’t detract from it.

The Education and the Workforce Committee advanced the legislation in similar fashion last month, with two Democrats joining Republicans.

Democrats respond: Just one voted to approve the legislation — Rep. Angie Craig of Minnesota.

Others said they thought the bill would undermine comprehensive coverage.

“If there’s a gap out there in the universe in terms of coverage … let’s fill the gap with good plans, not junk plans, not weak plans,” said Rep. John Sarbanes (D-Md.). “We think that workers deserve better … We love telehealth services. Let’s make sure that the coverage of them is as comprehensive as it can be.”

Health Subcommittee ranking member Anna Eshoo (D-Calif.) said the bill needs to protect workers from unexpected out-of-pocket costs.

Walberg tried unsuccessfully to address the concerns of Democrats by adding language protecting employees with preexisting conditions, providing for mental health parity, and requiring employers to notify workers that the plans don’t offer comprehensive health coverage.

Industry stance: Telehealth firms support the measure and have made it one of their top priorities, but it doesn’t have universal support.

The telehealth industry — including the Alliance for Connected Care, ATA Action and the Partnership to Advance Virtual Care — has pushed for its passage. It has also gotten backing from companies like Walmart and the ERISA Industry Committee, which advocates for large employers’ benefit plans.

But some mental health groups are skeptical. The American Psychological Association, the American Society of Addiction Medicine, the Eating Disorders Coalition for Research, Policy & Action and others have argued the bill would erode comprehensive coverage and create more barriers to care. A number of other health care groups, including the American Heart Association and American Cancer Society’s Cancer Action Network, also oppose the bill.

What’s next: The legislation could now go to the House floor.