On March 11, 2020 the Internal Revenue Service (IRS) issued Notice 2020-15 regarding high deductible health plans (HDHPs) and coverage related to 2019 Novel Coronavirus (COVID-19).
The IRS guidance for COVID-19 specifically addresses how a Health Savings Account (HSA)-qualified HDHP will not fail to be qualified because the HDHP provides health benefits associated with testing for and treatment of COVID-19. The notice allows an HDHP to provide testing and treatment without a deductible, or with a deductible below the minimum deductible (self only or family) for the HDHP. Therefore, an individual covered by an HSA-qualified HDHP will not be disqualified from being an eligible individual who may make tax-favored contributions to the HSA.
The IRS has determined that due to the “unprecedented public health emergency posed by COVID-19, and the need to eliminate potential administrative and financial barriers to testing for and treatment of COVID-19” health plans that otherwise meet the criteria of HSA-qualified HDHPs will not fail to be qualified merely because the HDHP provides medical care services and items purchased related to testing for and treatment of COVID-19 before the minimum deductible is satisfied.
Therefore, individuals covered by the HSA-qualified HDHP will not fail to be “eligible” merely because of the provision of those health benefits for testing and treatment of COVID-19. In addition, tax-favored contributions may also be made on behalf of eligible individuals by their employers.
This notice from the IRS provides flexibility to high deductible health plans to provide health benefits for testing and treatment of COVID-19 without the normal application of a deductible or cost sharing. Individuals are still allowed to contribute to their HSAs even though these services can be covered without meeting the minimum deductible.
It is important to note that specific coverage for these services will be determined by each particular health plan. Please contact your M3 Account Team if you have questions about how this may affect your organization’s health insurance plan.