HDHPs Can Cover COVID-19 Testing and Treatment Without Cost-Sharing

The IRS has ruled that high-deductible health plans ("HDHPs") may provide health benefits associated with testing for and treatment of COVID-19 without a deductible. As a result, individuals who are covered under such an HDHP will remain eligible to make contributions to a health savings account ("HSA"). The ruling was issued in Notice 2020-15 released on March 11, 2020.

Individuals are eligible to make contributions to HSAs only if they are enrolled in an HDHP and are not also enrolled in a health plan that is not an HDHP that provides coverage for any benefit covered under the HDHP. In general, an HDHP may not pay for medical expenses until the covered individual has met the HDHP's deductible. Notwithstanding, an HDHP is allowed to pay for certain preventive care benefits before a covered individual meets the HDHP's deductible. Prior to the issuance of Notice 2020-15, it was unclear whether an HDHP could maintain its status as an HDHP if it paid for COVID-19 testing or treatment before a covered individual met the plan's deductible.

In Notice 2020-15, the IRS seeks to remove barriers to testing and treatment of COVID-19 "due to the unprecedented public health emergency posed by COVID-19." Notice 2020-15 makes clear that an HDHP may cover COVID-19 testing and treatment before a covered individual satisfies the plan's deductible. Individuals covered under such a plan will remain eligible to make HSA contributions. Allowing HDHPs to pay for COVID-19 treatment and testing before the plan's deductible is met will help "avoid administrative delays or financial disincentives that might otherwise impede testing for and treatment of COVID-19 for participants in HDHPs." 

Employers with HDHPs who wish to take advantage of the relief provided in Notice 2020-15 should review their plan documents, or consult their insurers or third party administrators, to determine whether COVID-19 testing and treatment is covered under the plan. Plan amendments may be needed to clarify that coverage and that the plan may pay for the COVID-19 testing and treatment before a covered individual meets his or her deductible.

For more information, please contact Sarah Funke, Melissa Proffitt, Tara Schulstad Sciscoe, Chris Sears, Shalina Schaefer, or the Ice Miller employee benefits attorney with whom you work.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.