In a landmark development for employer-sponsored health plans, the Senate Amendment to H.R. 1 (“The Big Beautiful Bill”), Section 71306, makes permanent the telehealth safe harbor under 26 U.S. Code § 223(c)(2)(E).

This provision ensures that high-deductible health plans (HDHPs) can continue covering telehealth services before the deductible is met—without jeopardizing HSA eligibility.

Background: The Temporary Telehealth Safe Harbor

The original safe harbor was created by the CARES Act (2020) to support remote care during the COVID-19 emergency. It allowed HDHPs to cover telehealth services without applying the deductible—a move that encouraged cost-effective, remote access while preserving HSA eligibility.

This relief was extended multiple times, but it was set to expire for plan years beginning in 2025, creating significant uncertainty for plan sponsors.

What’s in Section 71306?

Section 71306 amends IRC § 223(c)(2)(E) to state that an HDHP will not lose its status simply because it offers telehealth or other remote care services with no deductible. This safe harbor is now permanent, meaning:

• HDHPs can cover telehealth from day one, with no deductible.

• Employees can continue contributing to HSAs even if they access telehealth early in the plan year.

What This Means for HR & Plan Sponsors

This change is a strategic win for employers and benefits professionals:

• Plan Design Certainty: Continue offering pre-deductible telehealth services confidently.

• Employee Experience: Remote care remains accessible and affordable.

• Compliance Simplified: Avoid toggling plan design based on expiring provisions.

Action Steps for 2025 Open Enrollment

To take full advantage of this legislative change:

✅ Update plan documents and Summary Plan Descriptions (SPDs).

✅ Communicate with employees about telehealth eligibility.

✅ Coordinate with TPAs and insurers.

✅ Train benefits staff and brokers.

Resources

• Senate Amendment Text – (Section 71306): https://www.congress.gov/bill/119th-congress/house-resolution/492

• IRC § 223(c)(2)(E) on Cornell Law: https://www.law.cornell.edu/uscode/text/26/223

Final Word

With Section 71306, Congress has given HR and benefits leaders the green light to invest long-term in telehealth-enabled HDHPs. This permanent safe harbor promotes both modern care delivery and tax-advantaged savings, aligning employee wellness with fiscal responsibility.

*Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. For a professional review of your plan design, consider having an employee benefits lawyer review your documents. Please contact Wellness Law, LLC for assistance.