IRS Provides Post-Pandemic Guidance on Preventive Care Expenses

August 24, 2023

The IRS has issued Notice 2023-37, providing information on expenses related to preventative care for the purposes of high deductible health plans (HDHPs) and eligibility for HSAs. This guidance modifies the position the IRS has previously taken on expenses related to COVID-19, but affirms previous guidance issued on certain other preventative care expenses.

Relief that was permitted in Notice 2020-15 will continue to apply only for plan years ending on or before December 31, 2024. Notice 2020-15 allowed HDHPs to provide testing and treatment for COVID-19 before satisfying a deductible, and specified that doing so would not disqualify individuals covered by the HDHP from being able to make HSA contributions. This relief was granted to ensure that those who contracted COVID-19 would receive proper medical care in order to help combat the Public Health Emergency and National Emergency. With the emergencies coming to a close, the IRS does not believe that such relief continues to be warranted.

The IRS also indicated that testing and treatment for COVID-19 would not be considered as the type of infectious disease screening that was considered to be preventative care under the guidance issued previously by IRS Notice 2004-23. By allowing the relief provided in Notice 2020-15 to continue through plans year ending on or before December 31, 2024, this should permit a smooth transition and allow employers to change their HDHP terms in order to ensure eligibility for HSA contributions is preserved. 

Previous guidance issued on services with an “A” and “B” rating by the United States Preventive Services Task Force on or after March 23, 2010, will continue to apply, and such services will be considered preventative care for the purposes of determining if the participant in the HDHP is eligible to make HSA contributions. Following the decision in Braidwood that affects the requirements of plans to cover preventative services without cost sharing under the Public Health Services Act (PHSA), the IRS had affirmed that even though such services may not be considered preventative care for purposes of the PHSA mandates, they would still be considered preventative care for the purposes of IRC Sec. 223. 

This affirms the guidance on A and B services that was issued in FAQs About Affordable Care Act and Coronavirus Aid, Relief, and Economic Security Act Implementation.