In a High-Deductible Health Plan, if the person is utilizing an HSA, then he or she cannot receive any benefits before reaching the deductible. Preventive services are exempt from that rule, meaning a person can receive things like eye exams, contraceptives, and flu shots covered 100% by insurance, even before the deductible is met. In fact, there is a list of preventive services that must be covered by all health plans at 100%, as outlined in the Affordable Care Act. However, guidance on preventive services for those with chronic conditions was vague.
Until recently, preventive care under a High-Deductible Health Plan (HDHP) did not include services or benefits to treat pre-existing illnesses, injuries or conditions. It made it so individuals with chronic conditions, such as diabetes and heart disease, were forced to pay out-of-pocket for preventive services before deductibles were met and benefits kicked in. What did this do? It often resulted in worsened conditions and the need for more extensive medical care.
As of July 17th, however, the IRS stated that, under Notice 2019-45, High-Deductible Health Plans can now cover preventive care for various chronic conditions before deductibles are met.
The new guidance includes 14 items and services that are likely to prevent the worsening of a chronic condition. Insulin, statin drugs, and blood pressure monitors are included.
What This Means
- HDHP sponsors can choose to include these new items in their list of covered preventive services.
- Certain medical care, including costs of prescription drugs, for specified chronic conditions are now considered preventative care.
- Individuals with chronic conditions can now seek and receive appropriate and relevant medical treatment.
How it Works
- Individuals may establish an HSA if they are covered under an HDHP and have no disqualifying health coverage.
- You can make pre-tax contributions to an HSA out of your paycheck.
- Employers can also contribute and contributions would not be considered income for tax purposes (so it’s tax-free!). Regardless of contributors, funds in an HSA will grow federal income tax-free.
With these new preventative care changes, individuals with specific chronic conditions can now receive affordable preventative care services and obtain the treatment they need to continue to live healthy lives.
Does This Change Existing Preventive Care Coverage?
Even before this IRS announcement, many preventive care services were and still are covered, even before a person reaches his or her deductible. For example, certain cancer screenings, diabetes screenings, depression screenings, and flu shots are all covered 100% as preventive care, meaning you don’t need to pay for them out-of-pocket, even if your deductible hasn’t been met.