IRS expands list of preventive care services

The IRS announced an expanded list of preventive services which health plans may choose to cover as a first-dollar or pre-deductible expense for high-deductible health plan enrollees.

Particularly, the expanded list includes treatments associated with chronic conditions, such as congestive heart failure, asthma and diabetes, among other conditions, which were not qualified as preventive care before.

While a high-deductible health plan generally means the enrollee is responsible for paying for all medical expenses before the deductible is met, preventive care services - defined as care received to prevent illnesses or diseases - are generally covered 100% by the enrollee's health plan, the idea being that prevention is less expensive than treatment.

Health plans are not required to pay for all medical services or issues classified as preventive care, so the expansion only increases the list of services that could be considered preventive.

The announcement is a great opportunity for employers to evaluate the health plan options they choose for their employees:

• For existing health savings account (HSA)-compatible plans: Employers in this group may now have the unmatched convenience of finding a plan that INCREASES coverage while at the same time REDUCING costs. This is a win-win opportunity, and employers or advisors in this category should look for HSA-compatible health plans that provide this benefit.
• For existing health reimbursement arrangement (HRA) plans: Employers in this group have the upside of achieving the health benefit goals of the HRA plan (e.g. providing first-dollar coverage for maintenance medications and a wider range of preventive services) with the added benefit of having HSA compatibility to employees. Employers and advisors should review every HRA plan design to determine the immediate benefits of transitioning to an HSA.
• For existing co-pay plans: Because of these new changes, employers in this group can make these plan designs HSA compatible with just a few modest adjustments. Doing this would allow their employees to open an HSA and begin saving for the future.

HealthEquity is ready and excited to help employers and advisors reap the benefits of this new rule, and we are committed to engaging, educating and serving employers so they are empowered to take full advantage of the win-wins that are now open to them.

This new announcement also provides exciting new benefits and money-saving opportunities for employees, especially those with a health savings account (HSA) and high-deductible health plan who are suffering from chronic conditions.

The IRS included a list, paired with chronic conditions, of the new issues or services that are considered preventive.

We at HealthEquity are ecstatic about these changes because of the many potential benefits it offers, and we are eager to help employers and employees save money and take full advantage of the win-win opportunities.

Contact us if you want a thorough review into what these changes can mean for you and your business.

Nothing in this communication is intended as legal, tax, financial, or medical advice. Always consult a professional when making life-changing decisions.