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IRS Allows HDHPs to Cover COVID-19 Testing and Treatment With No or Low Deductible



IRS Notice 2020-15 (Mar. 11, 2020)

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The IRS has issued guidance allowing high-deductible health plans (HDHPs) to provide benefits associated with testing for and treatment of the 2019 Novel Coronavirus (COVID-19) without a deductible, or with a deductible below the applicable HDHP minimum deductible (self-only or family). Under the guidance, a health plan that otherwise meets the HDHP requirements will not fail to qualify as an HDHP merely because it provides medical care services and items related to COVID-19 testing and treatment before the applicable HDHP minimum deductible is satisfied. Thus, individuals can remain covered under HDHPs that provide such benefits on a no- or low-deductible basis without any adverse effect on HSA eligibility. The guidance states that it does not modify previous guidance regarding the HDHP requirements in any other respects, noting that vaccinations continue to be considered preventive care for purposes of determining whether a health plan qualifies as an HDHP. The IRS also reminds participants in HDHPs or other health plans to consult their particular plans regarding the benefits provided for COVID-19 testing and treatment, including any deductible or other cost-sharing.

EBIA Comment: According to the IRS, the guidance is intended to remove administrative and financial barriers to testing for and treatment of COVID-19 due to the unprecedented public health emergency posed by the virus. Employers, HSA account holders, and HDHP providers will appreciate the IRS’s swift action regarding this issue. For more information, see EBIA’s Consumer-Driven Health Care manual at Section X (“HSAs: Required HDHP Coverage”), which will be updated for this development.

Contributing Editors: EBIA Staff.

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