Managing the Employment Impact of the Coronavirus: Employer High Deductible Health Plans Can Waive Deductible for COVID-19 Related Services
On March 11, the Internal Revenue Service (“IRS”) issued guidance indicating that until further notice, employer high deductible health plans (“HDHPs”) can waive deductibles that would otherwise apply to health services for testing and treatment of COVID-19 without taking their health plan out of HDHP status. Under the normal rules for HDHPs, if an HDHP waives the deductible for any services other than preventative care services, then it is not considered an HDHP and employees who participate in that plan are not eligible to contribute or receive employer contributions to a health savings account (“HSA”). The IRS guidance provides an exception to the normal rule, allowing employees to receive first-dollar coverage for COVID-19 testing and treatment and continue contributing or receiving employer contributions to an HSA.
If your company is interested in waiving deductibles for COVID-19-related services, then you will want to talk to your insurer or third-party administrator (for self-funded plans) before announcing that benefit to employees.
You can find the full text of the IRS guidance, Notice 2019-15, here. For more information about this, please contact your Foley relationship partner. For additional web-based resources available to assist you in monitoring the spread of the coronavirus on a global basis, you may visit the CDC and the World Health Organization.