IRS Guidance on COVID-19 Expenses and HDHPs

Posted March 13th, 2020

On March 11, 2020, the IRS released Notice 2020-15 confirming that a plan that otherwise satisfies the requirements for a high deductible health plan (HDHP) can maintain HDHP status and preserve participant eligibility for tax-advantaged HSA contributions where the plan provides health benefits associated with COVID-19 testing and treatment prior to the deductible being satisfied or without any cost sharing.


The IRS announced this relief due to the “need to eliminate potential administrative and financial barriers to testing for and treatment of COVID-19.”  Previous guidance related to HDHP requirements remains unchanged by the March 11, 2020 Notice except with respect to the relief for COVID-19 testing and treatment.


This guidance is welcome news for plan sponsors who will potentially face this issue in the near future and for employees who take advantage of their HSA eligibility to make pre-tax contributions to an HSA can continue to do so even if they are receiving zero-dollar testing and treatment for COVID-19.  Of course, the extent to which the plan covers COVID-19 testing and treatment and the specific cost-sharing and reimbursement provisions applicable to said benefits are a separate question plan sponsors should consider and review with their benefit advisor.


For more information see the full Notice available at:  Expect to see further guidance from the IRS and other federal, state and local agencies on COVID-19 and its effects on workplace policies and employee benefits.

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