IRS Issues Guidance on Coverage of Contraceptives and Other Preventive Services and Supplies 

The IRS has recently released two notices that change the rules on whether and how certain employer-sponsored health plans can cover the cost of male condoms and over-the-counter oral contraceptives and other specified preventive services supplies. 

Health FSAs and HRAs 

Health FSAs and HRAs are permitted to reimburse expenses incurred for medical care; this includes amounts paid for the prevention of disease.  Male condoms can be used to prevent pregnancy (which is not a disease) but can also be used to prevents STDs.  In Notice 2024-71, the IRS created a safe harbor, stating that it will treat expenses paid for condoms as amounts paid for medical care.  Consequently, health FSAs and HRAs are permitted, but not required, to reimburse claims for male condoms. 

High Deductible Health Plans (HDHPs) 

An HDHP is not permitted to reimburse any claim for benefits prior to the satisfaction of the statutorily prescribed deductible unless the claim is for preventive care.  In Notice 2024-75, the IRS determined that preventive care includes:  

• Male condoms, regardless of whether they are purchased with a prescription and regardless of the gender of the individual who purchases them.   

• Over-the-counter (OTC) oral or emergency contraceptives for an individual potentially capable of becoming pregnant. 

Accordingly, an HDHP is permitted (but not required) to reimburse claims for male condoms and OTC oral contraceptives¹ as preventive care, even if the plan deductible has not been met. 

Other Preventive Services 

In addition, Notice 2024-75 establishes that HDHPs may cover the following items as preventive care before satisfaction of the deductible: 

• Breast cancer screenings other than mammograms when used for preventive care; e.g.  Magnetic Resonance Imaging (MRIs), Ultrasounds, and similar breast cancer screening services. 

• Continuous glucose monitors for individuals diagnosed with diabetes under the same circumstances as other glucose monitors that pierce the skin.  This does not include smart watches and rings that purport to measure glucose levels without piercing the skin. 

• Insulin products otherwise treated as preventive care, regardless of whether they are prescribed to treat an individual diagnosed with diabetes or prescribed for the purpose of preventing the exacerbation of diabetes or the development of a secondary condition.  This includes devices used to administer the insulin products. 

Employer Action 

Employers may or may not wish to cover these items under their health FSAs, HRAs or HDHPs as permitted by the respective notices.  Employers should review their plan documents and SPDs to ensure that they are consistent with the employer’s intent.