Telehealth safe harbor: a call to action for health plans

By ami parekh

A little-noticed telehealth safe harbor provision tucked inside the One Big Beautiful Bill was a significant milestone in virtual care. Though it specifically addresses pre-deductible telehealth services in high-deductible health plans, the legislation has far wider implications for both care delivery and insurance design, especially in the commercial insurance market. In fact the permanent extension of a pandemic-era policy is a clear signal to health insurers that a new era of virtual care is under way.

The provision, which permanently extended an expired pandemic-era policy, is a win for employers and workers. After five years of uncertainty, employers are now empowered to provide telehealth services to their entire workforce at little or no cost, which has been shown to reduce access barriers and close gaps in care. For self-funded employers in particular, this flexibility in cost-sharing — combined with an increasingly sophisticated ecosystem of virtual care providers — will further accelerate innovation in benefits strategy and workforce well-being.

Less obviously, this employer-led innovation is also changing the virtual care landscape for a key partner: health plans. Though 20% of employers contract directly with specialized telehealth vendors, 78% rely on their health plan partners — and their vendors — to provide telehealth services for employees. As employers revisit their long-term virtual care strategy with new assurance in the wake of the safe harbor provision, health plans have an important seat at the table.

That seat is heating up, however. In a year when employer healthcare costs are projected to increase by more than 9%, employers are scrutinizing their partnerships and plan design to ensure that virtual care solutions are delivering meaningful value to their employees and their bottom line.

In a new annual survey from the Business Group on Health (BGH), more than three-quarters of employers said they are actively eliminating underutilized programs and underperforming vendors, or are considering doing so. Employers are also stepping up expectations in RFPs, evaluating potential healthcare partners on a growing list of factors and capabilities including performance guarantees, product and network design, reporting and analytics, and member experience.

In this light, the safe harbor provision is a call to action for health plans to evaluate their own virtual care strategy and partnerships through an employer’s lens. Three areas are especially important:

1. Quality

In the BGH survey, employers cited navigation to higher-quality providers and better quality transparency as top priorities — and virtual care is no exception. In last year’s survey, half of all employers expressed concerns about the quality of virtual care.

As with brick-and-mortar providers, the quality of virtual care varies widely across organizations and individual clinicians. However, quality frameworks for virtual care haven’t kept pace with advances in technology and the rapid expansion in use cases. Now that virtual care is fully integrated in care delivery and the patient experience, healthcare purchasers — including employers and public-sector organizations, as well as health plans — need to modernize how they assess the quality of virtual-first providers. Key questions include:

How do providers ensure their clinicians are following clinical guidelines?

How rigorous is the clinician credentialing process?

Does the provider network include expertise in high-need specialties (such as adolescent mental health) facing acute provider shortages?

Are accredited quality management programs in place?

How does the provider rate on key measures in areas such as chronic condition management and continuity of care?

As virtual and hybrid care become the norm, purchasers need to start evaluating all providers with the same rigor regardless of setting.

2. Integration

The boom in telehealth over the past decade has been a double-edged sword. While the market offers more options than ever before, the sheer number of solutions has become overwhelming for benefits leaders and employees alike. In fact, virtual care has become just as siloed as traditional healthcare; nearly 60% of employers cite the lack of integration between virtual care solutions as a challenge.

Moving beyond the narrow and transactional care that defined the Telehealth 1.0 era, leading virtual-first providers are breaking down silos by building physician networks spanning urgent care, primary care, behavioral health, and specialty care — including second opinions from experts at traditional hospitals and health systems. Critically, virtual-first providers should have a high-quality EHR connected to the clinicians their patients are seeing in person, enabling continuity of care across all settings.

Just like the streaming services on our phones and TVs, people and purchasers don’t want fragmented (and underutilized) apps and subscriptions from a dozen different providers. They want a core set of services tailored to their needs in a single, cohesive experience. Health plans have an important role to play in making that integration and consolidation possible.

3. Innovative plan design

Employers seeking to rein in costs are doubling down on alternative plan designs that incentivize high-quality, high-value care. In a recent McKinsey report, more than 85% of employers considering value-based models expressed strong interest in flexible co-payments and first-dollar deductible plans — exactly the type of flexibility and innovation the safe harbor legislation was intended to encourage.

Low- and no-cost virtual care has proven to be a powerful lever for improving both clinical and financial outcomes. In 2020, for instance, Walmart — the nation’s largest private employer — partnered with Included Health (where I serve as chief health officer) to test the impact of offering $0-copay virtual primary care and low-cost virtual therapy and psychiatry to its associates, roughly 50% of whom did not have an established primary care provider prior. Over the next three years, a case-control study found, the integrated services closed gaps in care and reduced ER visits and hospital stays, driving down the total cost of care by 11%.

Walmart’s example highlights how innovative approaches to plan design and cost-sharing, together with integrated and longitudinal virtual care, can remove traditional access barriers and steer employees toward high-quality care they can’t always get in brick-and-mortar settings. Health plans and service providers focused on value-based, virtual-first models will have a strategic leg up as this trend gathers momentum.

A new era for virtual care

The safe harbor provision underscored that virtual care is here to stay. But with staying power comes new challenges and increased expectations. As employers and workers increasingly turn to virtual care for a broader range of needs and services, health plans and their virtual care partners will need to work harder to anticipate those needs, provide high-quality integrated services, and explore new ways of improving access to high-value care. Those who don’t meet the moment may find themselves at sea.

Ami Parekh is the chief health officer at Included Health.