In response to the end of the COVID-19 public health emergency (PHE) and the COVID-19 national emergency,[1] the IRS has issued Notice 2023-37, which clarifies that health savings account (HSA)-qualifying high-deductible health plans (HDHPs) will no longer be allowed to cover COVID-19 testing and treatment prior to satisfying the HDHP deductible for plan years ending after December 31, 2024. Specifically, this guidance modifies previous IRS guidance issued in 2020 that allows HDHPs to cover COVID-19 testing and treatment prior to satisfying the minimum annual HDHP deductible.[2]
In addition, the notice clarifies that COVID-19 screening (i.e., testing) is not considered “preventive care” under the HDHP preventive care safe harbor, effective the date of the notice. In general, an HDHP is not allowed to cover any benefits until the minimum annual deductible is met; however, under the safe harbor, items or services that qualify as preventive care can be provided with no cost sharing.
The notice further provides that if COVID-19 testing is designated by the United States Preventive Services Task Force (USPSTF) with an “A” or “B” rating, then it may be covered prior to satisfying the HDHP deductible. Items and services recommended with an “A” or “B” rating by USPSTF are treated as “preventive care,” regardless of whether they must be covered without cost sharing.
Going forward
- Employer plan sponsors of HSA-qualifying HDHPs that currently cover COVID-19 testing and/or treatment prior to the satisfaction of the minimum annual HDHP deductible should amend the terms of the plan to no longer do so for plan years ending after December 31, 2024.
- Employer plan sponsors should communicate changes to the plan terms related to the recent IRS notice to plan participants and be aware that the changes may trigger disclosure requirements under ERISA (e.g., the need to provide a summary of material modifications to plan participants and beneficiaries).
Footnotes
- See “Departments issue FAQs on end of COVID-19 emergency declarations,” Insider, April 2023. Return to article
- See “IRS guidance on first-dollar coverage for COVID-19 testing and treatment,” Insider, March 2020. Return to article
