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New IRS Guidance Expands List of HSA-Eligible Medicines and Services for Preventative Care of Chronic Diseases
Some good news out of D.C. this week: Yesterday, the Treasury Department and the IRS continued their efforts to increase the use and flexibility of HSAs and high-deductible health plans (HDHPs), issuing a notice that expands the list of HSA-eligible medicines and services deemed as preventative care for those with chronic illnesses.
This builds on the executive order (EO) that President Trump issued last month on medical price transparency. That EO came on the heels of a ruling by the U.S. departments of Health and Human Services, Labor, and Treasury that allows employees to use their employer-funded individual coverage health reimbursement arrangement (ICHRA) to buy individual-market insurance, effective Jan. 1, 2020.
The medicines and services added yesterday to the list of HSA-eligible items share these characteristics: They are low cost; and, based on medical evidence, they are determined likely to prevent exacerbation of a chronic condition or the development of a secondary condition that requires significantly more expensive treatments.
As the notice states, “[P]reventive care generally does not include any service or benefit intended to treat an existing illness, injury or condition. However, the Treasury Department and the IRS are aware that the cost barriers for care have resulted in some individuals who are diagnosed with certain chronic conditions failing to seek or utilize effective and necessary care that would prevent exacerbation of the chronic condition. Failure to address these chronic conditions has been demonstrated to lead to consequences, such as amputation, blindness, heart attacks, and strokes that require considerably more extensive medical intervention.”
This important change will enable more Americans to better utilize health savings accounts (HSAs) and is a positive sign for Americans who have chronic conditions.
Access the full list of medicines and services included in the notice.