IRS Announces COVID-19 Coverage Without a Deductible Ends Next Year
The IRS recently released Notice 2023-37 regarding COVID-19 coverage and high-deductible health plans (HDHPs).
The notice states that HDHPs will generally no longer be permitted to cover testing for and the treatment of COVID-19 without a deductible or with a deductible below the minimum deductible (for self-only or family coverage) for an HDHP as of the end of 2024. The new notice cites the end of the COVID-19 public health emergency on May 11, 2023, as the reason for the change in treatment of coverage.
Specifically, the notice provides that the relief described in Notice 2020-15 applies only with respect to plan years ending on or before Dec. 31, 2024. In March 2020, the Treasury Department and the IRS issued Notice 2020-15, which provides that a health plan that otherwise satisfies the requirements to be an HDHP under section 223(c)(2)(A) will not fail to be an HDHP merely because the health plan provides benefits for medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible. As a result, individuals covered by such a plan will not fail to be eligible individuals under section 223(c)(1) merely because of the provision of those health benefits prior to the satisfaction of the applicable minimum deductible.
Notice 2023-37 also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)(C). In the notice, the Treasury Department and the IRS state that they are of the view that COVID-19 differs from the types of infectious diseases included in the preventive care safe harbor as specified in Notice 2004-23; therefore, the new notice clarifies that the preventive care safe harbor as described in Notice 2004-23 does not include screening (i.e., testing) for COVID-19, effective as of the date of publication of the notice. Items and services recommended with an "A" or "B" rating by the United States Preventive Services Task Force on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C), regardless of whether those items and services must be covered, without cost sharing, under Public Health Service Act Section 2713.
Notice 2023-37 will be published in IRB 2023-30, dated July 24, 2023.