On March 11, 2020, the Internal Revenue Service (IRS) announced that a High-Deductible Health Plan (HDHP ) can cover the cost of testing and treatment related to the coronavirus (COVID-19) pandemic, regardless of whether or not a participant has satisfied their deductible. This includes coverage of any potential vaccine developed to treat the coronavirus, as vaccines are considered preventative care. The IRS Notice 2020-15 outlines that this pre-deductible coverage of coronavirus care will not impact a HDHP’s status, meaning participants can still contribute to a Health Savings Account (HSA).
This is a welcome announcement for employees and employers alike, as it reduces cost barriers of coronavirus testing and treatment, and maintains their HSA eligibility. HSAs are an important money-saving tool for HDHP participants, allowing them to contribute pre-tax funds to a savings account to pay for non-deductible related healthcare costs (e.g., dental, vision), provided they are enrolled in a HDHP without disqualifying coverage.
It’s important to note that this notice is not a mandate. Employers sponsoring a HDHP can choose to take advantage of the IRS changes but are not required to offer pre-deductible coverage of coronavirus testing and treatment. However, some states have already acted by requiring health insurance cover these costs, and future legislation could see more changes related to this national emergency.