On July 17, 2019, the Internal Revenue Service (IRS) released Notice 2019-45 (“Notice”), which allows health saving account (HSA)-qualified high deductible health care plans (HDHPs) to provide certain services and benefits for chronic conditions before the deductible is met.
- HDHPs can now provide IRS-approved benefits to treat chronic conditions before the deductible is met.
- Employers that offer HDHPs should check with their HDHP carriers to determine whether they are providing the new list of IRS-approved benefits with lower deductibles. Because this law is still fairly new, many carriers have yet to take a position on what their future HDHP plan offerings will include.
- Employers with self-insured plans can choose to adopt the new list of IRS-approved benefits for their HDHP plans.
Generally, HSA-qualified HDHPs must satisfy minimum deductible requirements, and cannot provide benefits until the minimum deductible for that year is satisfied. However, HSA-qualified HDHPs can provide certain “preventative care benefits” before the deductible is met.
Preventative care benefits are those prescribed under the law, and include services such as annual physicals, well-childcare, and immunizations. Notably, prior to the Notice, preventive care did not include any service for treating existing illnesses, injuries, or conditions. Likewise, medications were not considered preventive care unless taken by an individual who was at risk for a condition, but did not exhibit symptoms, or unless they were taken to prevent a condition the individual had already recovered from.
How does the IRS Notice change HDHP benefits?
The Notice now expands the definition of “preventative care benefits” to include medical services received and items purchased, including prescription drugs, for certain chronic conditions. This means that HSA-qualified HDHPs can provide for the following IRS-approved services and benefits to treat certain chronic conditions before the deductible is met:
|Preventive Care for Specified Conditions||For Individuals Diagnosed with:|
|Angiotensin Converting Enzyme (ACE) inhibitors||Congestive heart failure, diabetes, and/or coronary artery disease|
|Anti-resorptive therapy||Osteoporosis and/or osteopenia|
|Beta-blockers||Congestive heart failure and/or coronary artery disease|
|Blood pressure monitor||Hypertension|
|Insulin and other glucose lowering agents||Diabetes|
|Peak flow meter||Asthma|
|Hemoglobin A1c testing||Diabetes|
|International Normalized Ratio (INR) testing||Liver disease and/or bleeding disorders|
|Low-density Lipoprotein (LDL) testing||Heart disease|
|Selective Serotonin Reuptake Inhibitors (SSRIs)||Depression|
|Statins||Heart disease and/or diabetes|
The treatment must be used by an individual diagnosed with the chronic condition to prevent the condition or to prevent the development of a secondary condition. Any care, services, or conditions not listed above (or not allowed by additional IRS guidance) will not be treated as preventive care.
What impact does this have on employers and plan participants?
Employers that offer an HSA-qualified HDHP and their participating employees should understand which conditions and services may now be included under the expanded preventive care definition. While plans are not “required” to offer chronic condition treatments with lower or no deductibles, we expect that many plans will adopt the expanded preventative care definition. The expanded definition could benefit employers—especially those with self-funded plans—and allow for further cost-savings by covering chronic illnesses before a deductible is met.
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