Compliance Bulletin: IRS Expands Preventive Care for HDHPs to Include Chronic Conditions

Recently we sent out the below Compliance Bulletin regarding Notice 2019-45, which details added treatments for several chronic conditions to the list of preventive-care benefits for which a high-deductible health plan (HDHP) can pay—prior to satisfying the annual deductible—without running afoul of the rules allowing pretax contributions to health savings accounts (HSAs). 

A few things to keep in mind with these changes:

  1. This change does not automatically make these treatments free. A plan is permitted to make them free, but not required to make them free. 
  2. The list of free preventive care has not changed. Preventive care, by definition, is care that is designed to keep someone healthy (immunizations, routine check-ups, routine testing). It is not care for diagnosed medical conditions.
  3. This change is aimed at making HDHP plans and HSA accounts a more relevant option for employees with chronic conditions. Prior to now, only preventive care was permitted to be covered in an HSA-eligible HDHP plan, prior to satisfaction of the deductible. Moving forward, a high deductible plan (HDHP) will be permitted to cover a specific list of treatments for chronic conditions before the deductible is met, without sacrificing the ability to make pre-tax contributions to an HSA account. Example: an HDHP that has a $2,000 deductible and 80% coinsurance could pay 80% for these treatments (patient would pay 20%) before the deductible is satisfied. This encourages people to stick to the care regimen prescribed by their doctors.
  4. There is a specific list of treatments for specific chronic conditions that are permitted – it is not all treatment for chronic conditions (See the full list below).