Male sterilization or male contraceptives not allowable preventive care under HDHP rules

In Notice 2018-12, the IRS has clarified that a health plan providing benefits for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for a high deductible health plan (HDHP), is not an HDHP. The Notice provides transition relief before 2020 to individuals with plans that provided coverage for male sterilization or male contraceptives without a deductible.

Background.

IRC Sec. 223 allows eligible individuals to deduct contributions to health savings accounts if they are covered under an HDHP and have no disqualifying coverage. Under the Patient Protection and Affordable Care Act, HDHPs are required provide preventive care benefits without imposing cost sharing requirements. Health Resources and Service Administration (HRSA) guidelines require that health plans provide coverage for contraceptives and sterilization for women with no cost sharing.

The HRSA guidelines do not provide for coverage of benefits or services relating to a man’s reproductive capacity, such as vasectomies and condoms. However, the IRS notes that several states have recently adopted laws that require certain health insurance policies and arrangements to provide benefits for male sterilization or male contraceptives without cost sharing.

Not preventive care.

Benefits for male sterilization or male contraceptives are not preventive care, and no applicable guidance provides for the treatment of these benefits as preventive care within the meaning of Sec. 223(c)(2(C). Accordingly, under current guidance, the IRS has found that a health plan that provides benefits for male sterilization or male contraceptives before satisfying the minimum deductible for an HDHP does not constitute an HDHP, regardless of whether the coverage of such benefits is required by state law.

Transition relief.

The IRS has provided transition relief for periods before 2020 during which coverage has been provided for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP. For these periods, an individual will not be treated as failing to qualify as an eligible individual under Code Sec. 223(c)(1) merely because the individual is covered by a health insurance policy or arrangement that fails to qualify as an HDHP solely because it provides (or provided) coverage for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP.

Comments requested.

Comments on Notice 2018-12 should include a reference to Notice 2018-12, and can be emailed to Notice.comments@irscounsel.treas.gov, or mailed to CC:PA:LPD:PR (Notice 2018-12), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

SOURCE: Notice 2018-12, I.R.B. 2018-12, March 5, 2018.
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