In response to the Executive Order issued on June 24th, the Internal Revenue Service (IRS) released Notice 2019-45 this week. This notice, for the purpose of Health Savings Accounts (HSAs), provides a list of medical care expenses that can now be treated as preventive care benefits under a high deductible health plan (HDHP). As a result of this Notice, preventive care has now been expanded to include care for certain chronic medical conditions (i.e. asthma, diabetes, etc.).

What does this mean?

The Treasury Department and the IRS have consulted with the Department of Health and Human Services, and 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.” This change is made in recognition of the cost barriers that exist for individuals with chronic conditions.

What is the impact of this Notice?

The effect of Notice 2019-45 is that, although it is not required, health plans will likely make additional preventive care coverage for the specified chronic conditions available at no- or low- cost for those covered by a HDHP that is designed to be paired with an HSA. It will be interesting to see how the health insurance industry will respond as this could significantly impact the out of pocket expenses for individual with the chronic medical conditions included in the notice.

Article Credit: Employee Benefits Corporation