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IRS Issues HDHP Guidance for End of COVID Emergency Period

by | Jul 6, 2023 |

In response to the ending of the COVID-19 public health emergency and national emergency, the IRS has issued Notice 2023-37, which modifies its prior guidance on benefits relating to the testing and treatment of COVID-19 by a health plan that otherwise satisfies the requirements of a high deductible health plan (“HDHP”).

Background. The IRS had issued Notice 2020-15 permitting HDHPs to cover testing and treatment for COVID-19, without affecting the status of a person as an “eligible individual” for tax-exempt Health Saving Account (“HSA”) contribution purposes.

In general, an individual is eligible to contribute (or have their employer contribute) to a HSA on a tax-favored basis if they are:

  • covered by a HDHP;
  • not covered under another medical insurance plan;
  • not enrolled in Medicare;
  • not receiving Social Security benefits; and
  • not claimed as a dependent on another person’s tax return.

In most cases, a qualified HDHP may not pay benefits until its deductible has been satisfied. In one exception to the general rule, expenses for “preventive care” may be paid before the deductible has been reached.

Preventive services include:

  • Items and services given an “A” or “B” rating by the United States Preventive Services Task Force (“USPSTF”) with respect to the individual involved;
  • Immunizations, as recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control;
  • Children’s preventive care and screenings as recommended by the Health Resources and Services Administration (“HRSA”);
  • Women’s preventive care and screenings as recommended by HRSA.

To facilitate the nation’s response to COVID-19, the IRS, in Notice 2020-15, said that, “[D]ue to the nature of this public health emergency, and to avoid administrative delays or financial disincentives that might otherwise impede testing for and treatment of COVID-19 for participants in HDHPs, all medical care services received and items purchased associated with testing for and treatment of COVID-19 that are provided by a health plan without a deductible, will be disregarded for purposes of determining the status of the plan as an HDHP.”

Notice 2023-37. With the ending of the COVID-19 public health emergency, Notice 2023-37 clarifies that the relief described in Notice 2020-15 applies only with respect to plan years ending on or before December 31, 2024. For subsequent plan years, a HDHP is “not permitted to provide health benefits associated with testing for, and treatment of, COVID-19 without a deductible… except as otherwise provided in this notice.”

The Notice then states that “COVID-19 differs from the types of infectious diseases included in the [HDHP] preventive care safe harbor as specified in [prior IRS notices], and this notice clarifies that the preventive care safe harbor as described in [the prior notices] does not include screening (i.e., testing) for COVID-19, effective as of the date of publication of this notice.”

However, items and services recommended with an “A” or “B” rating by the USPSTF on or after March 23, 2010, are still treated as preventive care, regardless of whether these items and services must be covered, without cost sharing, under the Affordable Care Act (“ACA”), which has a different definition of “preventive care.” Accordingly, if COVID-19 testing were to be recommended with an “A” or “B” rating by the USPSTF, then that testing would be treated as required preventive care under the ACA, regardless of whether it must be covered without cost sharing.

Notice 2023-37 is available at: