In Information Letter 2017-0005, the IRS replied to the request of an individual who wanted to contribute to an HSA but could not locate a high-deductible health plan (HDHP) in his area through the health insurance marketplace. The deductible and out-of-pocket maximums complied with the HDHP requirements in Code Section 223. However, the insurance carrier informed the individual that it was not an HSA-eligible HDHP (although the specific reasons were not articulated in the Information Letter).
The IRS confirmed that not only must an HDHP meet those two requirements, but it cannot provide other nonpreventive care benefits before the deductible is met. Examples include first-dollar prescription drugs and limited office visits provided before the deductible is satisfied.
While this letter did not address employer-provided health coverage, it serves as a good reminder to employers about the importance of providing clear, consistent, and continuous education to employees on the various HSA eligibility rules.