IRS Issues Guidance on COVID-19 Expenses for HDHPs and Clarifies HSA Rules on Preventive Care

August 17, 2023
Hall Benefits Law, LLC

Due to the end of the COVID-19 public health and national emergencies, the Internal Revenue Service (IRS) has issued guidance to high-deductible health plans (HDHPs) in the form of Notice 2023-37. This notice provides guidance on COVID-19 expenses for and clarifies items and services related to preventive care under health savings account (HSA) eligibility rules.

Under its 2020 guidance, the IRS allowed HDHPs to provide COVID-19 testing and treatment benefits with no or low deductibles (below the applicable HDHP minimum deductible). This guidance allowed individuals to receive benefits for these services without adversely affecting their HSA eligibility.

However, since the public health and national emergencies have ended, the 2020 guidance is no longer necessary. As a result, the 2020 guidance will apply only to plan years ending on or before December 31, 2024.

Furthermore, the IRS previously issued guidance concerning the preventive care safe harbor. Under the safe harbor, HDHPs can offer certain preventive care items and services on a no or low-deductible basis. This guidance clarifies that the preventive care safe harbor does not include screening for COVID-19, effective as of the date of the guidance, nor does it include screening for common and episodic illnesses, such as the flu. However, it may include screening for other infectious diseases.

Likewise, consistent with the IRS FAQs issued in response to the Braidwood decision, items and services recommended by the United States Preventive Task Force (USPTF) with an “A” or “B” rating after March 23, 2010, fall within the preventive care safe harbor. These items and services are within the safe harbor regardless of whether the preventive services mandate of the Affordable Care Act (ACA) requires coverage without cost-sharing.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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