The Blue Cross and Blue Shield Service Benefit Plan, also known as the Federal Employee Program, has selected Teladoc to provide general medical and behavioral health services for the 2018 benefit year, the company announced earlier in a press release. Teladoc shares are up 11%, or $3.30, to $33.15 in midday trading.

The Federal Employee Program covers roughly 5.3M federal employees, retirees and their families. "We are excited to offer telehealth to our members in next year's offerings," said William Breskin, senior vice president of government programs at the Blue Cross Blue Shield Association. "We are always working to provide federal workers and their families with the most innovative solutions to meet their health needs. By providing a telehealth platform for our members, they will be able to get access to quality care anywhere and at any time."

Oppenheimer analyst Mohan Naidu said in a research note to investors that he confirmed the Federal Employees will have direct access to Teladoc "without any limitations or restrictions (behind) of nurse line." The analyst expects telehealth awareness and reimbursement will continue to grow.