Beginning with claims having dates of service on or after July 17, 2019, the Treasury Department and the Internal Revenue Service (IRS) allows an expanded list of preventive care benefits to be provided by an HSA-eligible high deductible health plan (HDHP) under section 223(c)(2) of the Internal Revenue Code (Code) prior to applying the deductible (or with a deductible below the minimum deductible for an HDHP). The expanded services are listed in Notice 2019-45.

Also, attached to this Alert is a comprehensive list of preventive care services that an HDHP may pay prior to meeting the deductible along with an indicator showing which of the preventive care services are required by the Affordable Care Act.

Action Required: Plan sponsors with HDHPs should consider whether they want to permit any of these services to be paid prior to meeting all or a portion of the deductible.

Background

Section 223 of the Code permits eligible individuals to establish Health Savings Accounts (HSAs) if the individual is covered under an HDHP that satisfies certain requirements with respect to minimum deductibles (currently $1,350 for self-only coverage and $2,700 for family coverage). Generally, an HDHP may not provide benefits for any year until the minimum deductible for that year is satisfied. However, an HDHP may provide certain preventive care benefits prior to the patient paying their deductible (or with a deductible below the minimum annual deductible otherwise required). To be a preventive care benefit for purposes of section 223, the benefit must either be described as preventive care for purposes of section 1861 of the Social Security Act or be determined to be preventive care in guidance issued by the Treasury Department and the IRS.

Under the Affordable Care Act (ACA), all non-grandfathered group health plans including HDHPs are required to provide preventive care services without cost sharing (such as a deductible or copayment). IRS Notice 2013-57 provides that any item that is a preventive service under the ACA also will be treated as preventive care under section 223.

Additional Preventive Care for HDHPs

The Treasury Department and the IRS, in consultation with the Department of Health and Human Services, determined that the following services should be classified as preventive services for individuals with the specified chronic conditions:

Note the above listed preventive services for specified conditions are not treated as preventive care that is required to be provided without cost sharing for purposes of the ACA.

Summary of Preventive Services

Attached to this Alert is a summary of preventive care services. Columns indicate whether they are required preventive services under the ACA and whether they are may be paid prior to the deductible for participants with HSAs.

If you have any questions about health plan requirements for preventive care services, contact your Cheiron consultant.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.