June 28, 2022

Volume XII, Number 179

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June 28, 2022

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June 27, 2022

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Coverage for Coronavirus Tests and Treatments do not Impact HSA Contribution Eligibility

Under the Internal Revenue Code (Code), a taxpayer is ineligible to make pre-tax contributions to a health savings account (HSA) unless the taxpayer is covered by a high deductible health plan (HDHP). A plan will not qualify as a HDHP unless it satisfies Code minimum deductible and other requirements.

On March 11, 2020 the Internal Revenue Service (IRS) issued guidance to provide that a health plan will not lose HDHP status if it covers testing and/or treatment for coronavirus (COVID-19) for an individual before he or she satisfies the plan’s deductible or cost-sharing requirements. Consequently, a health plan can provide first dollar coverage for coronavirus testing and treatments without jeopardizing the ability of plan participants to make pre-tax HSA contributions. This guidance applies until the IRS issues further clarification.

IRS guidance does not require that a plan cover these services. Rather, it allows a plan to cover them at no charge to participants without jeopardizing HDHP status. If you have uncertainty about your plan’s coverage of costs related to COVID-19, you should review your plan document and/or summary plan description.

Copyright © 2022 Godfrey & Kahn S.C.National Law Review, Volume X, Number 72
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About this Author

Todd Cleary Employee Benefits Attorney
Shareholder

Todd Cleary is a shareholder in the firm’s Employee Benefits Practice Group. Todd works extensively with retirement plans, such as ESOPs, pension, profit sharing, 401(k), 403(b), 457, cash balance, SIMPLE and SEP plans. Todd’s experience with welfare plans includes the design and compliance of medical plans (including issues related to ERISA, COBRA and HIPAA), wellness programs, cafeteria plans, disability plans (short-term and long-term), and group term life insurance plans. Todd has also worked with nonqualified deferred compensation plans, multiple employer welfare arrangements (MEWAs...

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