IRS Issues Helpful Coronavirus-Related Guidance for Employers with High Deductible Health Plans

Akerman LLP - HR Defense
Contact

Akerman LLP - HR Defense

Benefit plan sponsors are responding to participant questions about the coronavirus/COVID-19. In particular, employers’ HR departments are fielding questions about whether their health plan will pay for any necessary testing and/or treatment. Both full-insured and self-funded plans are widely announcing plans to waive the cost of physician-ordered tests. But until now, there was one huge open question. Could participants in certain consumer-driven health plans actually take advantage of those financial offerings without adverse tax implications? That issue is created because the IRS has rigid requirements on High Deductible Health Plans (HDHP) in order to allow participants to also contribute to a Health Savings Account (HSA). In general, if an HSA participant has not met the required deductible, any non-preventive services cannot be discounted or offered for free. Absent any guidance from the IRS, therefore, employers with multiple health plan options would have been able to offer free tests to some employees but not to others.

Fortunately for employers and employees alike, on Wednesday, March 11, 2020, the IRS issued Notice 2020-15, confirming that a health plan will not fail to satisfy the High Deductible Health Plan (HDHP) requirements, and a participant will not be disqualified from contributing to a Health Savings Account (HSA), simply because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum statutory deductible required for an HDHP.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Akerman LLP - HR Defense | Attorney Advertising

Written by:

Akerman LLP - HR Defense
Contact
more
less

Akerman LLP - HR Defense on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.