28 Jul New IRS Guidance on Post-Pandemic HDHP Relief
On June 23, 2023, the IRS issued Notice 2023-37 addressing health savings accounts (HSAs) eligibility with high deductible health plans (HDHPs) after the COVID-19 pandemic relief. The notice also addressed Affordable Care Act (ACA) preventive services due to the Braidwood v. Becerra decision.
HSAs Eligibility
To be eligible for an HSA, an individual cannot have any disqualifying, non-HDHP coverage. During the pandemic, relief was provided to allow pre-deductible coverage of COVID-19 testing and treatment without jeopardizing HSA eligibility. The notice states that the relief provided in Notice 2020-15 is no longer needed now that the public health emergency (PHE) and national emergency (NE) have ended.
HSA eligibility relief will end on January 1, 2025, for calendar year HDHPs.
HSA eligibility relief will end on the 2023 plan year end date for non-calendar year HDHPs.
Plans that continue providing pre-deductible coverage for COVID-19 testing and related services will disqualify employees from making contributions or taking withdrawals from an HSA.
Employers subject to the Employee Retirement Income Security Act (ERISA) should prepare to update plan documents and distribute an amendment to the Summary Plan Description according to the required timelines.
The pre-deductible safe harbor for HDHPs, described in Notice 2004-23, is not changed for the preventive care described in the notice. The current notice states that COVID-19 is not included in the prior notice’s definition of infectious diseases covered under the safe harbor.
Original content by the HR Support Center. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.