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.
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.
Congestive heart failure; or coronary artery disease
Blood pressure monitor
Insulin and other glucose‑lowering agents
Peak flow meter
Hemoglobin A1c testing
International normalized ratio (INR) testing
Liver disease and/or bleeding disorders
Low-density lipoprotein (LDL) testing
Selective serotonin reuptake inhibitors (SSRIs)
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.
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.
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.
900 North Shoreline Boulevard Mountain View, CA 94043 (650) 966-1492
Check the background of your financial professional on FINRA'S BROKERCHECK
Investment advisory services offered through Liberty Wealth Management LLC, a registered investment advisor with the SEC. Securities offered through Liberty Group, LLC, Member FINRA, SIPC. For additional information on lwm or your investment advisor representative, please visit the following website: www.adviserinfo.sec.gov.