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Preventive Care Expanded Under HDHPs

August 7, 2019

The IRS has issued Notice 2019-45 which expands the scope of preventive care that a high-deductible health plan (HDHP) can cover before the deductible is satisfied, while still allowing an eligible individual to contribute to a Health Savings Account. The guidance addresses an issue that has long concerned employers and service providers. While this guidance provides a welcome expansion, the expansion's narrow scope should be noted.

What Changed?

Under the HSA rules, preventive care generally does not include services or benefits intended to treat existing illnesses, injuries, or conditions. However, a June 2019 Executive Order called for relaxing those rules to allow HDHPs to provide low-cost preventive care to help maintain the health of individuals with chronic conditions. The executive order is meant to address concerns that, for cost reasons, certain individuals might not obtain the care necessary to prevent their conditions from worsening. This deferral of care has the potential consequence of requiring more extensive and costly medical intervention (e.g., heart attacks and strokes), exacerbating the condition, or developing a secondary condition. 

The Expanded List

The new guidance provides an exhaustive list of services and items that can now be considered preventive care for HSA purposes when prescribed for individuals diagnosed with the associated condition. The list includes 14 medical services or items for individuals with 11 specified chronic conditions.  It is important to note that only these specifically identified services and diagnoses qualify for this new expansion. 

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; 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

 

Not a Mandate

The IRS Notice does not mandate that an HDHP cover any or all of the expanded listed services and items. The HDHP sponsor may choose to cover none, some, or all prior to a participant satisfying the deductible.

Effective Date

The expanded definition is effective as of July 17, 2019.  Even though the Notice is effective immediately, there is no immediate requirement for plan sponsors to implement the Notice’s allowable coverage of preventive services and items.  In addition, the IRS has indicated they will review the list approximately every 5-10 years to determine whether any items or services should be removed or added.  This is generally considered a very long window for potential review.

Next Steps

Employers who sponsor an HDHP will want to consider whether to expand preventive coverage as allowed under this guidance.  Considerations of timing and impact on potential premiums should also be considered. 

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