Pursuant to a directive in last month’s Executive Order 13877, the Treasury Department issued guidance yesterday that lists particular preventive care items and services that may be covered by a high deductible health plan (HDHP) even before the deductible is satisfied.
Many employers offer employees the opportunity to enroll in an HDHP with a health savings account (HSA). The HSA may be funded by employer or employee contributions, or both. The account then reimburses the employee for health care expenses, including expenses subject to the HDHP deductible.
Apart from these HSA reimbursements, an employee participating in an HSA cannot receive any benefits before the HDHP deductible is satisfied. However, the HDHP deductible does not apply to expenses that are considered preventive in nature. There is only limited guidance that identifies specific preventive care expenses for HDHP purposes other than expenses that are regarded as preventive care under the Affordable Care Act (which health plans, including HDHPs, must cover at 100 percent).
An appendix in the new guidance adds to this list of preventive care expenses, identifying 14 cost-effective items and services likely to prevent the worsening of a chronic condition or the development of a secondary condition that would require costly treatment. The list includes commonly known items, such as insulin, statin drugs, and blood pressure monitors, and items and procedures that are less familiar, at least by their generic names, such as International Normalized Ratio testing (for blood-clotting conditions) and Selective Serotonin Reuptake Inhibitors (a class of antidepressants). The guidance provides that this list will be reevaluated periodically, but no more than every five to 10 years, to promote stability in the applicable rules.
The guidance became effective when issued on July 17, 2019. HDHP sponsors should review the new guidance promptly. For some HDHPs, plan sponsors may seek to expand the list of preventive care items and services covered under the HDHP. For other HDHPs, which already treated certain chronic care expenses as preventive, plan sponsors will need to consider whether changes to that list of preventive items and services are now necessary or appropriate.