IRS High Deductible Health Plan (HDHP) Rules


This is an update of an article originally published in the Q1 2019 edition of WellInformed.

A high-deductible health plan (HDHP) is a plan with a higher deductible than a traditional insurance plan and a maximum limit on the annual deductible and out-of-pocket medical costs incurred for covered expenses. Out-of-pocket expenses include copayments and other amounts, but do not include premiums.

The Internal Revenue Service (IRS) defines a HDHP as any plan with a deductible of at least $1,350 for an individual or $2,700 for families1. Additionally, the IRS limits the total yearly out-of-pocket expenses for HDHPs to $6,650 for an individual or $13,300 for families for in-network services1. These limits do not apply to out-of-network services.

Under the Affordable Care Act (ACA) rules, group health plans and insurers must provide coverage for certain preventive health services without a deductible. Notice 2013-57, issued by the IRS, addresses the scope of permitted health services provided by an HDHP under the rules for health savings accounts (HSAs). The IRS issued Publication 969 (2017), which defined preventive care to include, but is not limited to, the following2:

  • Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals
  • Routine prenatal and well-child care
  • Child and adult immunizations
  • Tobacco cessation programs
  • Obesity weight-loss programs
  • Screening services

The difference between the IRS HDHP rules and the ACA preventive care coverage requirements is that the IRS rules allow for patient cost-sharing, whereas the ACA preventive care coverage requirements do not. These rules only apply to HDHP plans to override the patient’s deductible for preventive care services, including pharmaceutical products, so the patient is only responsible for his or her copayment or coinsurance.

Effective July 17, 2019, the IRS published Notice 2019- 453 to include additional chronic conditions to the list of preventive care benefits already identified. The new additions include Selective Serotonin Reuptake Inhibitors (SSRIs), peak flow meters and diabetic test meters. In accordance with IRS recommendations, WellDyneRx has added these to the IRS Preventive Drug List.

With the addition of Selective Serotonin Reuptake Inhibitors (SSRIs), peak flow meters and diabetic glucose testing meters to the IRS Preventive List, clients may see an increase in costs. Prior to their inclusion, patients were responsible for meeting their full deductible prior to the claim processing at the Plan copay. With this new IRS ruling in place, these products will bypass the deductible and the patient will only be charged the Plan copay or designated Plan copay (if different from Plan copay) for the IRS Preventive List.

For more information, contact your Account Executive.

References

  1. United States Department of the Treasury. Internal Revenue Service. Notice 2004-23: Part III – Administrative, Procedural and Miscellaneous. Internal Revenue Service, 2004. https://www.irs.gov/pub/irs-drop/n-04-23.pdf
  2. United States Department of the Treasury. Internal Revenue Service. Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans. Internal Revenue Service, 2017 https://www.irs.gov/publications/p969
  3. Additional Preventive Care Benefits Permitted to be Provided by a High Deductible Health Plan Under § 223. Internal Revenue Service, 2019. Available at: https://www.irs.gov/pub/irs-drop/n-19-45.pdf 

 


2019 Quarter Three WellInformed Table of Contents