X


Let's Talk

Let us help you make
an informed decision
Required:

How can we help you?

Looking for client support?
Click here instead.

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.

 

Compliance Snapshot

  • 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.

 

Background

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
Inhaled corticosteroids Asthma
Insulin and other glucose lowering agents Diabetes
Retinopathy screening Diabetes
Peak flow meter Asthma
Glucometer Diabetes
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.

 

Additional Resources:

Notice 2019-45: Additional Preventative Care Benefits Permitted to be Provided by a High Deductible Health Plan Under § 223

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.