Important Information for HDHPs Regarding COVID-19 and Preventive Care

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The IRS recently issued Notice 2023-37, providing updated guidance for high deductible health plans (HDHPs) regarding COVID-19 testing and treatment expenses, as well as clarifying the classification of certain items and services as preventive care. This notice emphasizes that only individuals covered by HDHPs are eligible to contribute to health savings accounts (HSAs). While HDHPs generally require the annual minimum deductible to be met before paying for medical expenses, they do have the flexibility to offer preventive care benefits without a deductible or with a deductible below the minimum requirement.

COVID-19 Testing and Treatment

The IRS previously issued Notice 2020-15 in March 2020, allowing HDHPs to cover COVID-19 testing and treatment without imposing deductibles. However, Notice 2023-37 explains that with COVID-19 federal emergency periods ending, the relief provided by Notice 2020-15 is no longer necessary and applies only to plan years ending on or before December 31, 2024. Starting from plan years ending after December 31, 2024, HDHPs are not permitted to provide benefits for COVID-19 testing and treatment without a deductible, or with a deductible below the minimum requirement for an HDHP.

Preventative Care

Regarding preventive care, the IRS has established a safe harbor (Notice 2004-23) that allows certain screening services to be covered by HDHPs without imposing a deductible. Note that the COVID-19 screening is not currently included in the IRS' preventive care safe harbor. Under the Affordable Care Act (ACA), most health plans are required to cover a set of preventive care services without imposing deductibles, especially when these services are provided by in-network providers. These services typically include evidence-based items or services that have received an A or B rating in the current recommendations of the U.S. Preventive Services Task Force (USPSTF).

In March 2023, the U.S. District Court for the Northern District of Texas struck down the ACA's preventive care coverage requirements based on an A or B rating by the USPSTF on or after March 23, 2010. Although the District Court's ruling is currently on hold pending the case's appeal, the future of this coverage requirement remains uncertain. However, Notice 2023-37 clarifies that HDHPs may continue to consider items and services with an A or B rating by the USPSTF on or after March 23, 2010, as preventive care that can be covered without imposing a deductible, regardless of whether such coverage is mandated by the ACA.

Notice 2023-37 also highlights that if COVID-19 testing receives an A or B rating by USPSTF, HDHPs can cover the testing without imposing a deductible. Download the bulletin for more details.

This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.