Authored by Larry Grudzien, Attorney-At-Law
In Notice 2019-45, the IRS expands the list of preventive care benefits permitted to be provided by a high deductible health plan (HDHP) under Code Section 223(c)(2) without a deductible, or with a deductible below the applicable minimum deductible (self-only or family) for an HDHP.
Under Code Section 223(c)2)(A), a plan does not fail to qualify as a HDHP merely because it does not have a deductible (or has a small deductible) for preventive care (e.g., first dollar coverage for preventive care). However, except for preventive care, a plan may not provide benefits for any year until the deductible for that year has been met.
In Notice 2004-23 and Notice 2004-50 provides guidance on what Preventive care includes, but is not limited to, the following:
* Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals,
* Routine prenatal and well-child care,
* Child and adult immunizations,
* Tobacco cessation programs,
* Obesity weight-loss programs, and
* Certain screening services or devices (an extensive list of permissive screening devices and tests are contained in an appendix to IRS Notice 2004-23).
Preventive care did not generally include any service or benefit intended to treat an existing illness, injury, or condition. Treatment of a related condition made during a preventive care or screening was considered to be preventive care when it would be unreasonable or impracticable to perform another procedure to treat the condition and such treatment would be considered to be incidental or ancillary to a preventive care service or screening. For example, the removal of polyps during a diagnostic colonoscopy would be considered preventive.
Drugs or medications were part of preventive care when taken by an individual who has developed risk factors of a disease that had not yet manifested itself or not yet become clinically apparent or to prevent the reoccurrence of a disease from which a person has recovered. Examples included treatment of high cholesterol with cholesterol-lowering medications to prevent heart disease or the treatment of recovered heart attack or stroke victims with Angiotensin-converting Enzyme (ACE) inhibitors to prevent reoccurrence.
In Notice 2019-45, IRS has determined that certain medical care services received and items purchased, including prescription drugs, for certain chronic conditions should be classified as preventive care for someone with that chronic condition. These medical services and items are limited to the specific medical care services or items listed in the Appendix provided below. In making this determination, the IRS noted that each medical service or item, when prescribed for an individual with the related chronic condition, evidences the following characteristics:
* The service or item is low-cost;
* There is medical evidence supporting high cost efficiency (a large expected impact) of preventing exacerbation of the chronic condition or the development of a secondary condition; and
* There is a strong likelihood, documented by clinical evidence, that with respect to the class of individuals prescribed the item or service, the specific service or use of the item will prevent the exacerbation of the chronic condition or the development of a secondary condition that requires significantly higher cost treatments.
These criteria were used in determining the particular services and items listed in the Appendix, but the IRS indicated that this notice does not expand the scope of preventive care beyond the list. IRS, will periodically review the list of preventive care services and items listed in the Appendix and similar services and items to determine whether additional services or items should be added or any should be removed from the list. The periodic review is expected to occur approximately every five to ten years to promote stability and to avoid confusion by participants in, or sponsors or providers of, HDHP arrangements.
The IRS considers benefits for services and items set forth in the Appendix below as preventive care for purposes of Code section 223(c)(2)(C). These specified services and items are treated as preventive care only when prescribed to treat an individual diagnosed with the associated chronic condition specified in the Appendix, and only when prescribed for the purpose of preventing the exacerbation of the chronic condition or the development of a secondary condition. If an individual is diagnosed with more than one chronic condition, all listed services and items applicable to the two or more conditions are preventive care. However, services and items not listed in the Appendix that are for secondary conditions or complications that occur notwithstanding the preventive care are not treated as preventive care for purposes of Code section 223(c)(2)(C).
Preventive Care for Specified Conditions
For Individuals Diagnosed with
|Angiotensin Converting Enzyme (ACE) inhibitors||Congestive heart failure, diabetes,and/or coronary artery disease|
|Anti-resorptive therapy||Osteoporosis and/or osteopenia|
|Beta-blockers||Congestive heart failure and/or coronary artery disease|
|Blood pressure monitor||Hypertension|
|Insulin and other glucose lowering agents||Diabetes|
|Peak flow meter||Asthma|
|Hemoglobin A1c testing||Diabetes|
|InternationalNormalized Ratio (INR) testing||Liver disease and/or bleeding disorders|
|Low-density Lipoprotein (LDL)testing||Heart disease|
|Selective Serotonin Reuptake Inhibitors(SSRIs)||Depression|
|Statins||Heart disease and/or diabetes|
For a copy of Notice 2019-45, click on the link below: https://www.irs.gov/pub/irs-drop/n-19-45.pdf
Larry Grudzien, Attorney-At-Law, can be contact at (708) 717-9638 or via email at email@example.com.
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