Risk & Business Magazine Spectrum Insurance Spring 2020 | Page 7

HDHPs
IRS ALLOWS HDHPs TO COVER
CORONAVIRUS COSTS
O
n March 11, 2020, the
Internal Revenue Service
(IRS) issued Notice
2020-15 to advise that
high deductible health
plans (HDHPs) can pay for 2019 Novel
Coronavirus (COVID-19) testing and
treatment before plan deductibles have
been met without jeopardizing their
status. According to the IRS, this also
means that individuals with HDHPs
that cover these costs may continue
to contribute to their health savings
accounts (HSAs).
The IRS also noted that any COVID-19
vaccination costs count as preventive
care and can be paid for by an HDHP
without cost sharing.
HEALTH PLAN COVERAGE
To protect the public from the growing
spread of COVID-19, many states
are directing or encouraging health
insurance issuers to cover COVID-19
testing without imposing a deductible
or other cost sharing. These states
include, for example, California, New
York, Oregon, and Washington. Some
issuers are voluntarily waiving cost
sharing for COVID-19 testing without
a state directive. Self-funded plans may
also voluntarily waive these costs due
to the public health emergency posed by
COVID-19.
Only individuals who are covered by
HDHPs can make contributions to
HSAs. To qualify as an HDHP, a health
plan cannot pay medical expenses (other
than preventive care) until the annual
minimum deductible has been reached.
IRS Notice 2020-15 provides an
exception to this general rule to remove
financial barriers that might otherwise
delay testing for and treatment of
COVID-19.
ACTION STEPS
Employers with HDHPs should consult
with their plan’s issuer or benefits
administrator regarding their plan’s
benefits for COVID-19 testing and
treatment, including the potential
application of any deductible. +
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