High-deductible health plans (HDHPs) may cover coronavirus (COVID-19) testing and treatment without jeopardizing participants’ eligibility for a health savings account (HSA), according to March 11 guidance from the Internal Revenue Service (IRS).
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An otherwise HSA-compatible HDHP will not lose that status “merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP,” the IRS stated in Notice 2020-15. “Therefore, an individual covered by the HDHP will not be disqualified from being an eligible individual” who may contribute to an HSA.
“Due to the nature of this public health emergency, and to avoid administrative delays or financial disincentives that might otherwise impede testing for and treatment of COVID-19 for participants in HDHPs,” the IRS applied this safe harbor to “all medical care services received and items purchased associated with testing for and treatment of COVID-19.”
The guidance does not actually require health plans to cover any specific service. “Individuals participating in HDHPs or any other type of health plan should consult their particular health plan regarding the health benefits for testing and treatment of COVID-19 provided by the plan, including the potential application of any deductible or cost sharing,” the IRS stated.
Section 223 of the Internal Revenue Code, which governs HSAs, requires account holders to be enrolled in an HDHP. To avoid discouraging preventive care, the IRS has previously carved out certain preventive and chronic care services that can be covered on a first-dollar basis without disqualifying a health plan from being an HDHP.
“This guidance does not modify previous guidance with respect to the requirements to be an HDHP in any manner other than with respect to the relief for testing for and treatment of COVID-19,” the IRS noted. “Vaccinations continue to be considered preventive care under section 223(c)(2)(C) for purposes of determining whether a health plan is an HDHP.”