IRS Clarifies Scope of Preventive Services for HDHPs | Practical Law

IRS Clarifies Scope of Preventive Services for HDHPs | Practical Law

The IRS has issued Notice 2013-57, which provides that a health plan will not fail to be high-deductible health plan because it provides preventive health services without a deductible, as required under the Affordable Care Act (ACA).

IRS Clarifies Scope of Preventive Services for HDHPs

Practical Law Legal Update 7-540-6666 (Approx. 4 pages)

IRS Clarifies Scope of Preventive Services for HDHPs

by Practical Law Employee Benefits & Executive Compensation
Published on 12 Sep 2013 • USA (National/Federal)
The IRS has issued Notice 2013-57, which provides that a health plan will not fail to be high-deductible health plan because it provides preventive health services without a deductible, as required under the Affordable Care Act (ACA).
On September 9, 2013, the IRS issued Notice 2013-57, which addresses the scope of permitted health services than can be provided by a high deductible health plan (HDHP), under the rules for health savings accounts (HSAs). The notice provides that a health plan does not fail to qualify as a HDHP because it provides preventive health services without a deductible, as required by the Affordable Care Act (ACA). Under the ACA rules, group health plans and insurers must provide first-dollar coverage for certain preventive health services (see Practice Note, Coverage of Preventive Health Services under the ACA).
In general, individuals are eligible to participate in an HSA if they are covered by an HDHP and do not have disqualifying health coverage. An HDHP is a health plan that:
However, under an administrative safe harbor, a health plan does not fail to be treated as an HDHP because it lacks a deductible for preventive care. As a result, HDHPs can provide preventive care either:
  • Without a deductible.
  • With a deductible below the minimum annual deductible.
Earlier IRS guidance, Notice 2004-23, listed numerous items that are preventive care for purposes of the preventive care safe harbor, including:
  • Periodic health evaluations, for example, 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 for cancer, heart disease and other diseases and conditions.
Notice 2004-23 also indicated that preventive care does not include services or benefits to treat existing illness, injury, or condition. However, Notice 2004-50 later clarified that if it would be unreasonable or impracticable to perform another procedure to treat the condition, any treatment that is incidental or ancillary to a preventive care service or screening under Notice 2004-23 also falls within the preventive care safe harbor.
As an example, Notice 2004-50 indicated that removal of polyps during a diagnostic colonoscopy is preventive care that can be provided before the deductible in an HDHP has been satisfied.
Under Notice 2013-57, preventive care for purposes of the HSA rules includes:
  • Anything that is preventive care under Notices 2004-23 and 2004-50, regardless of whether it is preventive care under the ACA's preventive health services rules.
  • Services required to be provided as preventive health services under the ACA and its implementing guidance.
As a result, a health plan does not fail to qualify as an HDHP under the HSA rules because it provides, without a deductible, the preventive health services required under the ACA.

Practical Impact

This guidance answers an open question under the ACA's preventive services rules, which include a set of preventive health services that are different than the items of preventive care included under the HSA rules. As a result, preventive health services required under the ACA rules can be provided, without a deductible, by an HDHP.