Late last week, the IRS published additional guidance modifying the COVID-19 coverage that high deductible health plans (HDHPs) can provide while maintaining their HSA-qualified status. This notice was provided in response to the end of the COVID-19 Public Health Emergency (PHE) and National Emergency Period.
HSA participants can only contribute to their HSA accounts if they are enrolled in an HSA-qualified HDHP and have no other disqualifying coverage. An essential component of HSA-qualified HDHPs is that they must typically subject all medical care to the plan’s deductible, except for services that are categorized as preventive care. However, as a result of the COVID-19 PHE and National Emergency Period, the IRS issued guidance in 2020 permitting HDHPs to maintain HSA-qualified status while covering items and services related to testing and treatment of COVID-19 without subjecting such care to a deductible.
The new guidance clarifies that this relief will only remain in place for HDHPs with plan years that end on or before December 31, 2024. This means that groups with calendar year plans will need to begin subjecting such services to their HDHP’s deductible once their plan renews in 2025. In contrast, groups with non-calendar year HDHPs must begin applying the plan’s deductible to COVID-19 testing and treatment services once their plan renews in 2024. However, if the United States Preventive Services Task Force recommends that COVID-19 testing and/or treatment be considered preventive care at any point in the future, HDHPs can resume covering those services without subjecting them to the plan’s deductible.
Of note, this recent guidance has no impact on COVID-19 vaccinations, which still qualify as preventive care. HDHPs should continue to cover such vaccinations without subjecting them to a deductible.