Offering telehealth program benefits to workers who are not eligible for an employer's group major medical plan can turn into a viscous trap. (Photo: Simon Speed/Wikimedia Commons PD)
Both employers and workers are getting used to the idea that part-time jobs, temporary jobs, freelancing and “permalancing” are here to stay.
Federal regulators want employers to respect workers' need for benefits programs that comply with various federal laws and regulations, including the requirements governing notices about COBRA benefits continuation rights.
Erica Cordova, legal counsel at One Digital, a major health and benefits consulting firm, has an idea: In some cases, conflicts between the new “gig worker” economy and established benefits rules could lead employers into terrible traps.
One of the most vicious traps involves employer efforts to offer telehealth program benefits to workers who are not eligible for an employer's group major medical plan.
Most workers like the idea that they can call a doctor or nurse and get advice about sore throat, or even a prescription for acne medication.
Employers may see offering telehealth services as a nice major medical alternative for gig workers.
But, if an employer tries to offer a gig worker access to a stand-alone telehealth plan, that can lead to compliance pain — even if a gig worker pays for the telehealth plan.
The federal government has classified many other popular health-related benefits products, such as dental insurance and hospital indemnity insurance, as “excepted benefits,” or benefits that fall outside the scope of the major medical insurance requirements in the Employee Retirement Income Security Act of 1974 (ERISA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Affordable Care Act (2010).
The government has not classified telehealth services plans as an excepted benefit, Cordova said.
If an employer offers a telehealth plan separately from its group health plan, federal regulators may treat the telehealth plan as a group health plan, and expect it to meet the federal standards for group health plans, Cordova said.
An employer could face a penalty of $100 per employee per day for offering a defective group health plan.
If an employer with a stand-alone telehealth plan for gig workers fails to follow the same COBRA continuation coverage rules that apply to a group major medical plan, the employer could end up owing $110 in COBRA violation penalties per affected gig worker per day, Cordova said.
She said an employer that tries to offer gig workers stand-alone access to an employee assistance program (EAP) could face similar issues.
If regulators have concerns about EAP access, the final outcome of any compliance actions could depend on the plan details, Cordova said.
— Read Critical Illness Market Keeps Growing: Gen Re, on ThinkAdvisor.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
