IRS Expands Preventive Care Benefits for Chronic Conditions

Employees can now purchase chronic illness medications with health savings account (“HSA”) dollars instead of paying off their high deductible for insurance to cover the costs. On July 17, 2019, the Internal Revenue Service (“IRS”) expanded the list of preventive care benefits that may be provided by a high deductible health plan (“HDHP”) to include medical services and items associated with certain chronic conditions.

Previous guidance by the Department of Treasury (the “Treasury”) and the IRS did not allow preventive care to include any service or benefit intended to treat an existing illness, injury, or condition. An executive order on June 24, 2019, directed the Treasury and the IRS to explore new ways to expand the use and flexibility of HDHPs and HSAs. Specifically, “to issue guidance to expand the ability of patients to select high deductible health plans that can be used alongside HSAs and cover low-cost preventive care, before the deductible, that helps maintain health status for individuals with chronic conditions.”

Pursuant to the executive order and after consulting with the U.S. Department of Health and Human Services (“HHS”), the new list now classifies certain medical services received and items purchased for certain chronic conditions as preventive care and can be found in the Appendix of Notice 2019-45:

The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice.