The IRS has issued new emergency guidance that allows employers and insurers to waive the cost of coronavirus testing and treatment for workers who are enrolled in highdeductible health plans (HDHPs).
Major health insurers reported that employers had been asking if they could make the change to their high-deductible plans without breaching IRS regulations regarding such plans.
Employers were concerned that free testing would technically prevent organizations and employees from contributing to linked health savings accounts (HSAs) on a pre-tax basis.
COVID-19 Testing, Treatment
Specifically, the new guidance states that HDHPs with attached HSAs will not lose their plan status if they provide medical care services and items related to coronavirus testing or treatment even before an enrollee has met their deductible.
While the regulation does not require HDHPs to cover the testing and treatment without any out-of-pocket expenses by the enrollee, the plans can do so – and without breaching the rules regarding these plans.
The new rule could also pave the way for non-HDHPs like PPOs and HMOs to also provide coronavirus testing without out-of-pocket costs for their participants.
While there is no rule preventing them from doing so now, many of the country’s large PPOs and HMOs have been reluctant to start offering free testing until they know how HSA plans would be affected.
Typically, enrollees in HDHPs with an attached HSA are required to pay all of their medicinal costs up to their deductible before the insurer will pay.
The Trump administration earlier issued another rule that allows HDHPs to foot the bill for certain preventative health services, such as vaccines and screenings for specific conditions like diabetes and high blood pressure, before the deductible is met.
In 2018, 23% of employees enrolled in employer-sponsored health insurance plans were enrolled in an HDHP with an HSA. The 2020 minimum annual deductible is $1,400 for self-only HDHP coverage, and $2,800 for family HDHP coverage.
The notice only applies to coronavirus and does not void any other requirements governing HDHPs and HSAs.
It states that “Individuals participating in HDHPs or any other type of health plan should consult their particular health plan regarding the health benefits for testing and treatment of COVID-19 provided by the plan, including the potential application of any deductible or cost sharing.”
The decision came after the American Benefits Council, which includes many of the largest corporations in the country, sent a letter to the Treasury Department asking it to confirm that HDHPs could cover COVID-19 testing and treatment without enrollees first having to meet their deductibles.
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