COVID-19, Employee Benefits Compliance

HDHP May Allow COVID-19 Testing and Treatment Before Deductible

The Internal Revenue Service (IRS) has just released a notice discussing coverage for the COVID-19 virus. IRS Notice 2020-15 allows High-Deductible Health Plans (HDHP) to cover COVID-19 testing and related treatment (any coming vaccinations are already covered as preventive care) before reaching the deductible.

A health plan that otherwise satisfies the requirements to be a HDHP under section 223(c)(2)(A) of the Internal Revenue Code will not fail to be an HDHP under section 223(c)(2)(A) merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. Therefore, an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a Health Savings Account (HSA).

This is a permissive, and not mandatory, order. It is ultimately up to each health plan to decide whether to allow such services to be offered before reaching the deductible. The specific language uses the word MAY not must, allowing “flexibility.” It is important that any HDHP participants contact their respective health plans to determine if such coverage is provided before meeting the deductible.

We will keep you informed of changes that affect employee benefits compliance rules.

 

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