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As part of coordinated federal efforts to eliminate potential barriers to testing and treatment related to the COVID-19 pandemic, on March 11, 2020, the Internal Revenue Service (IRS) released <a href="https://www.irs.gov/pub/irs-drop/n-20-15.pdf" target="_blank" rel="noopener">IRS Notice 2020-15</a>, guidance that gives high deductible health plans (HDHPs) greater flexibility to provide pre-deductible coverage of COVID-19 testing and treatment. According to Notice 2020-15, employer-sponsors of HDHPs may choose, but are not required, to waive deductibles (or apply lower deductibles) for medical care services received and items purchased related to COVID-19 testing and treatment. Providing this coverage will not disqualify a plan as an HDHP for health savings account (HSA) eligibility purposes, and therefore will not trigger a participant’s loss of eligibility to contribute to an HSA.

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[U]ntil further guidance is issued, a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code) will not fail to be an HDHP under section 223(c)(2)(A) merely 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 deductible (self only or family) for an HDHP. Therefore, an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a health savings account (HSA).

A few things to keep in mind about this guidance:

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Julia Ann Love 216.566.5686 <a href="mailto:Julia.Love@ThompsonHine.com">Julia.Love@ThompsonHine.com</a>

Beth A. Mandel 513.352.6695 <a href="mailto:Beth.Mandel@ThompsonHine.com">Beth.Mandel@ThompsonHine.com</a>

Stephen R. Penrod 216.566.5641 <a href="mailto:Stephen.Penrod@ThompsonHine.com">Stephen.Penrod@ThompsonHine.com</a>

Laura A. Ryan 513.352.6727 <a href="mailto:Laura.Ryan@ThompsonHine.com">Laura.Ryan@ThompsonHine.com</a>

Kim Wilcoxon 513.352.6524 <a href="mailto:Kim.Wilcoxon@ThompsonHine.com">Kim.Wilcoxon@ThompsonHine.com</a>

Additional Resources

We have assembled a firmwide multidisciplinary task force to address clients’ business and legal concerns and needs related to the COVID-19 pandemic. Please see our <a href="https://www.thompsonhine.com/services/covid-19-task-force" target="_blank" rel="noopener">COVID-19 Task Force</a> page for additional resources, including a checklist to help employers review workplace policies and procedures and a link to a recording of our recent webinar, “COVID-19: Planning Considerations for Employers.”

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel. This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhinestaging.contentpilot.net/wp-content/uploads/2022/05/COVID-19_Update_-_IRS_Issues_Guidance_on_High_Deductible_Health_Plans_and_COVID-19_Expenses.pdf

IRS Issues Guidance on High Deductible Health Plans and COVID-19 Expenses

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