Health Plan Will Not Fail To Qualify As HDHP Because It Provides Preventive Care Without A Deductible: IRS

In Notice 2013, 57, the Internal Revenue Service issued clarification that a health plan will not fail to qualify as a high-deductible health plan (HDHP) merely because it provides preventive health care without a deductible, as required by the Patient Protection and Affordable Care Act (ACA).

Background. Eligible individuals may establish health savings accounts (HSAs) if they have qualifying coverage under a HDHP. Generally, Sec. 223(c)(2)(A) prohibits an HDHP from providing benefits for any year until the minimum deductible for that year is satisfied. However, Notices 2004-23 and 2004-50 specified that a HDHP is allowed to provide preventive care benefits without a deductible. The ACA added PHSA Sec. 2713, requiring group health plans and health insurance issuers to provide benefits for certain preventive health services without imposing cost-sharing requirements.

Guidance. Notice 2013-57 states that a health plan will not fail to qualify as an HDHP under Sec. 223(c)(2) merely because it provides without a deductible the preventive care health services required under PHSA Sec. 2713 to be provided by a group health plan or a health insurance issuer offering group or individual health insurance coverage. Therefore, the IRS noted that any preventive care allowed under Notice 2004-23 and 2004-50 will continue to be treated as preventive care for purposes of Sec. 223. In addition, any preventive care that is allowable under PHSA Sec. 2713 also will be treated as preventive care under Sec. 223.

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