ACA News & Publications

ACA Pathways: IRS Expands List of Preventive Care Services Under HSA Qualifying High Deductible Health Plans

July 18, 2019

On July 17, 2019, the Internal Revenue Service (IRS) issued Notice 2019-43, expanding the list of preventive care to include a range of chronic conditions that are now permitted to be provided by a high deductible health plan (HDHP) under Internal Revenue Code (Code) section 223 without a deductible, or with a deductible below the applicable minimum deductible (self-only or family) for an HDHP.

The Treasury Department and the IRS, in consultation with the Department of Health and Human Services, have determined that certain medical care services received and items purchased, including prescription drugs, for certain chronic conditions should be classified as preventive care for someone with that chronic condition.

Background

Code section 223 permits eligible individuals to establish Health Savings Accounts (HSAs) as long as certain requirements are met, one of which is being enrolled in an HDHP that provides no disqualifying health coverage, meeting certain requirements as to minimum deductibles and maximum out-of-pocket expenses. Generally, an HDHP may not provide benefits for any year until the minimum deductible for that year is satisfied. However, plans are permitted to cover preventive care services without a deductible or with a deductible below the minimum annual deductible required by Code section 223.

To be a preventive care benefit as defined for purposes of section 223, the benefit must either be described as preventive care for purposes of Social Security Act section 1861 or be determined to be preventive care in guidance issued by the Department of the Treasury (Treasury Department) and the IRS.

Expanded List of Preventive Care Services

As a general rule, preventive care does not include services for any service or benefit intended to treat an existing illness, injury, or condition. However, this Notice provides that certain services and items for individuals with the specified chronic conditions listed can be treated as preventive care. Each of these services or items, when prescribed for an individual with the related chronic condition, must contain the following characteristics:

  • The service or item is low-cost;
  • There is medical evidence supporting high cost efficiency (a large expected impact) of preventing exacerbation of the chronic condition or the development of a secondary condition; and
  • There is a strong likelihood, documented by clinical evidence, that with respect to the class of individuals prescribed the item or service, the specific service or use of the item will prevent the exacerbation of the chronic condition or the development of a secondary condition that requires significantly higher cost treatments.

Accordingly, the following medical care services and items were determined to preventive care for someone with that chronic condition:

Preventive Care for Specified Conditions: For Individuals Diagnosed with:
Angiotensin Converting Enzyme (ACE) inhibitors Congestive heart failure, diabetes, and/or coronary artery disease
Anti-resorptive therapy Osteoporosis and/or osteopenia
Beta-blockers Congestive heart failure and/or coronary artery disease
Blood pressure monitor Hypertension
Inhaled corticosteroids Asthma
Insulin and other glucose lowering agents Diabetes
Retinopathy screening Asthma
Peak flow meter Diabetes
Glucometer Diabetes
Hemoglobin A1c testing Diabetes
International Normalized Ratio (INR) testing Liver disease and/or bleeding disorders
Low-density Lipoprotein (LDL) testing Heart disease
Selective Serotonin Reuptake Inhibitors (SSRIs) Depression
Statins Heart disease and/or diabetes

This Notice does not expand the scope of preventive care beyond the list. Furthermore, any medical care previously recognized as preventive care for these rules is still treated as preventive care.

For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:

Burnham Benefits
949.833.2983
inquiries@burnhambenefits.com


Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.

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