Preventive Care Expanded For HSA Participants

Cost barriers for care have resulted in some individuals who are diagnosed with certain chronic conditions failing to seek or utilize effective and necessary preventive care.

The IRS has expanded the list of preventive care for HSA participants to include certain care for chronic conditions.

The Internal Revenue Service has added care for a range of chronic conditions to the list of preventive care benefits that may be provided by a high deductible health plan (HDHP).

In prior guidance, the Treasury Department and the IRS have stated that preventive care generally does not include any service or benefit intended to treat an existing illness, injury, or condition.

However, the Treasury Department and the IRS are aware that the cost barriers for care have resulted in some individuals who are diagnosed with certain chronic conditions failing to seek or utilize effective and necessary care that would prevent exacerbation of the chronic condition.

Failure to address these chronic conditions has been demonstrated to lead to consequences, such as amputation, blindness, heart attacks, and strokes that require considerably more extensive medical intervention.

Individuals covered by an HDHP generally may establish and deduct contributions to a Health Savings Account (HSA) as long as they have no disqualifying health coverage. To qualify as a high deductible health plan, an HDHP generally may not provide benefits for any year until the minimum deductible for that year is satisfied. However, an HDHP is not required to have a deductible for preventive care (as defined for purposes of the HDHP/HSA rules).

The Treasury Department and the IRS, in consultation with the Department of Health and Human Services, have determined that certain medical care services received and items purchased, including prescription drugs, for certain chronic conditions should be classified as preventive care for someone with that chronic condition.

These medical services and items are limited to the specific medical care services or items listed for the associated chronic conditions specified in Notice 2019-45.

Any medical care previously recognized as preventive care for these rules is still treated as preventive care.

The following services and items for individuals with the specified chronic conditions listed are now treated as preventive care:

Preventive Care for Specified Conditions	For Individuals Diagnosed With
Angiotensin Converting Enzyme (ACE) inhibitors	Congestive heart failure, diabetes, and/or coronary artery disease
Anti-resorptive therapy	Osteoporosis and/or osteopenia
Beta-blockers	Congestive heart failure and/or coronary artery disease
Blood pressure monitor	Hypertension
Inhaled corticosteroids	Asthma
Insulin and other glucose lowering agents	Diabetes
Retinopathy screening	Diabetes
Peak flow meter	Asthma
Glucometer	Diabetes
Hemoglobin A1c testing	Diabetes
International Normalized Ratio (INR) testing	Liver disease and/or bleeding disorders
Low-density Lipoprotein (LDL) testing	Heart disease
Selective Serotonin Reuptake Inhibitors (SSRIs)	Depression
Statins	Heart disease and/or diabetes

In determining that these particular medical services and items are classifiable as preventive care with respect to an individual with the relevant chronic condition, the following characteristics must be evident when prescribed for an individual with the related chronic condition:

The service or item is low cost.
There is medical evidence supporting high-cost efficiency (a large expected impact) of preventing exacerbation of the chronic condition or the development of a secondary condition.
There is a strong likelihood, documented by clinical evidence, that with respect to the class of individuals prescribed the item or service, the specific service or use of the item will prevent the exacerbation of the chronic condition or the development of a secondary condition that requires significantly higher-cost treatments.

If you have questions about these new guidelines and how your HSA may be affected, contact your tax professional.