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IRS expands preventive care for HDHPs

On July 17th 2019, the IRS released Notice 2019-45 which adds to the list of preventive care benefits that can be covered under high deductible health plans without making someone ineligible for an HSA. This was in direct response to the June 2019 Executive Order calling for HDHPs to stay HSA-compatible while covering certain treatments for chronic conditions before the deductible is met.

As a reminder, an individual is only eligible to open and contribute to an HSA if they are enrolled in HDHP coverage and have no other disqualifying coverage that pays expenses before the deductible is met, except for preventive care.  

Under this new guidance, very specific treatments and medications prescribed for certain chronic conditions are now considered preventive care when looking at HSA-eligibility (see the appendix on the last page of notice). In other words, if the plan covers these procedures or drugs when prescribed for the listed chronic conditions at 100% with no cost-sharing, then this would not make an individual ineligible for an HSA.

The IRS makes it clear that this notice does not affect health care reform’s definition of preventive care, which is entirely different from what’s considered preventive care under an HDHP. This means whatever preventive services must be covered 100% under health care reform may not necessarily include the treatments on this new list, and are therefore optional for employers that sponsor HDHPs.

Thus, self-insured plans should weigh the costs of covering these treatments at 100% now as a way to prevent future large claims related to these chronic conditions. Fully-insured carriers offering HDHPs, however, may or may not include these treatments automatically as preventive care.

This guidance is effective immediately, so plans will likely want to consider these changes during the next renewal cycle.

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