The Internal Revenue Service (IRS) released a Notice expanding the list of preventive care benefits permitted to be provided by a High-Deductible Health Plan (HDHP) under section 223(c)(2) of the Internal Revenue Code (Code) without a deductible, or with a deductible below the applicable minimum deductible (self-only or family) for an HDHP. In response to the Trump Administration’s Executive Order a year ago, the IRS sought to expand the use of Health Savings Accounts (HSA) by allowing certain medical services to be classified as preventive care for qualified individuals with specified conditions.
These specified services and items are treated as preventive care only when prescribed to treat an individual diagnosed with the associated chronic condition specified below, and only when prescribed for the purpose of preventing the exacerbation of the chronic condition or the development of a secondary condition. If an individual is diagnosed with more than one chronic condition, all listed services and items applicable to the two or more conditions are preventive care. However, services and items not listed in the Appendix that are for secondary conditions or complications that occur notwithstanding the preventive care are not treated as preventive care for purposes of section 223(c)(2)(C).
Additional Permitted Preventive Care for Chronic Conditions
This Notice also addresses a previous IRS Notice regarding male sterilization as preventive care services. In response to Notice 2018-12, this latest Notice clarified that benefits for male sterilization or male contraceptives are not preventive care and no applicable guidance issued by the Treasury Department and the IRS provides for including these benefits in the definition of preventive care within the meaning of section 223(c)(2)(C). Accordingly, a health plan that provides benefits for male sterilization or male contraceptives before satisfying the minimum deductible for an HDHP will not constitute a qualified HDHP, regardless of whether the coverage of such benefits is required under state law.
Article Update (07-19-2019)
The Notice did not specify these services to be mandated – only that it is permitted. Additional guidance is likely to come to clarify these points. Leavitt Group will issue a compliance alert once this happens. Until then, plan sponsors should consider whether or not to add these services their next plan year as a permitted expanded list of preventive services – many Pharmacy Benefits Managers (PBMs) and plans even had a more extended list than the preventive care mandate list. For information on what the preventive services mandated list entails, see https://www.healthcare.gov/preventive-care-adults/ and http://www.ncsl.org/research/health/american-health-benefit-exchanges-b.aspx.
Remember, ACA only requires private plans to cover preventive services at no cost for specified categories based on recommendations of the United States Preventive Services Task Force. See: https://www.kff.org/health-reform/fact-sheet/preventive-services-covered-by-private-health-plans/
How, when & if carriers will expand this list is beyond the scope of the Notice. Feel free to ask your specific carrier partners.