IRS Expands List of Preventive Care Benefits for High Deductible Health Plans (“HDHP”)

On October 17, 2024, the IRS issued Notice 2024-75 (“Notice”) to expand the list of preventive care benefits permitted to be provided by a high deductible health plan (“HDHP”) on a pre-deductible basis (or with a deductible below the minimum deductible) to include new services such as over-the-counter medications and certain birth control, mammogram services and diabetic products. These rules apply to fully insured, level-funded, and self-insured plans.

Employer Action Items

• Employer plan sponsors should work with their carriers and/or third-party administrators to ensure these newly classified preventive services are eligible for pre-deductible reimbursement, like other previously classified preventive care related treatments and services.
• Employer plan sponsors should note the application of retroactive effective dates for these newly classified preventive treatments and services and should request their carriers and/or third-party administrators reprocess claims associated with coverage of the newly classified preventive treatments and services.

Summary

Notice 2024-75 clarifies that the following items and services qualify as preventive care for HDHP purposes:

• Over-the-counter (“OTC”) oral contraceptives, including OTC birth control pills and emergency contraceptives, for individuals potentially capable of becoming pregnant, regardless of whether they are purchased with a prescription;
• Male condoms, regardless of whether they are purchased with a prescription and regardless of the gender of the individual covered by the HDHP who purchases them;
• Breast Cancer Screenings: all types of breast cancer screenings, not just mammograms for individuals who have not been diagnosed with breast cancer;
• Diabetic Products: continuous glucose monitors for individuals diagnosed with diabetes, and selected insulin products (regardless of whether they are prescribed to treat an individual diagnosed with diabetes or prescribed for the purpose of preventing the exacerbation of diabetes or the development of a secondary condition).

HDHPs and Preventive Care

Individuals must be covered by an HDHP (and have no disqualifying health coverage) to be eligible to contribute to a health savings account (“HSA”). To qualify as an HDHP, a health plan cannot pay benefits—excepting preventive care benefits—until the required minimum deductible has been satisfied by the participant.

An HDHP may apply a low deductible (or no deductible) to its coverage of preventive care related treatments and services without jeopardizing individuals’ HSA eligibility. Note that the Patient Protection and Affordable Care Act (“ACA”) requires non-grandfathered health plans to cover specific recommended preventive care services on a “first-dollar basis” (that is, without any copayments, deductibles or other cost sharing). Currently, the ACA’s preventive care mandate requires health plans to cover OTC preventive products without cost sharing only when they are prescribed by a health care provider.

Effective Dates

The Notice’s changes for HDHPs have different retroactive effective dates:

• OTC oral contraceptives and male condoms: effective for plan years beginning on or after December 30, 2022.
• Breast Cancer Screenings: effective date April 12, 2004, for breast cancer screenings such as mammograms, magnetic resonance imaging (“MRIs”), ultrasounds, and similar breast cancer screening services.
• Diabetic Products: effective July 17, 2019, for continuous glucose monitors, and plan years beginning after December 31, 2022, for selected insulin products.

Additional Resources:

• https://www.irs.gov/pub/irs-drop/n-24-75.pdf