On March 11, 2020, the Internal Revenue Service (IRS) issued a news release (IR-2020-54) and a tax notice (Notice 2020-15) (pdf) announcing high-deductible health plans (HDHP) can pay for 2019 coronavirus (COVID-19)-related testing and treatment without jeopardizing their status.
For individuals with health savings accounts (HSA), this announcement means individuals with an HDHP that covers COVID-19 costs may continue to contribute to their health savings accounts.
The IRS issued this notice “to facilitate the nation’s response to the 2019 Novel Coronavirus ….” The notice explains further, “Part of the response to COVID-19 is removing barriers to testing for and treatment of COVID-19.”
In Notice 2020-15, posted at IRS.gov, the IRS states health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles are met. The IRS further noted vaccination costs continue to count as preventive care and can be paid for by an HDHP.
Notice 2020-15 applies only to HSA-eligible HDHPs. The IRS directs employees and other taxpayers in any other type of health plan to contact their own plan administrators with specific questions about coverage.
Health plan sponsors with questions about the IRS announcement may contact the employee benefits lawyers at Woods Rogers PLC. The IRS response to COVID-19 is a developing story. Stay tuned.