New IRS guidance expands the types of preventive care benefits that high-deductible health plans are required to cover with no out-of-pocket costs for plan enrollees.
The changes are aimed at reducing out-of-pocket costs for diabetes-related expenses, certain cancer screenings and contraceptives. The guidance, released in two notices — N-2024-71 and N-2024-75, — can result in real savings for Americans.
Benefits under HDHPs typically do not kick in until the enrollee has met their deductible. However, these plans are required to cover a number of preventive care services, as outlined by the Affordable Care Act, without any cost-sharing on the part of the health plan enrollee.
What’s Considered As Preventive Care
Under notice 2024-75, the following are considered “preventive care,” meaning that HDHPs will be required to cover them at no cost to their enrollees and even before they’ve reached their deductible:
- Breast cancer screenings for individuals who have not been diagnosed with this type of cancer.
- Continuous glucose monitors for individuals diagnosed with diabetes. Covered monitors must measure glucose levels using a similar detection method or mechanism as other glucometers.
- Insulin products, 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.
- Oral contraceptives (including emergency contraceptives) and condoms.
The above will be added to the other preventive care expenditures that health plans are required to cover under the ACA.
Under notice 2024-71, flexible spending arrangements, health reimbursement accounts and health savings accounts will be required to reimburse for the cost of condoms.
Inform Your Team
If you offer HDHPs, HSAs, HRAs or FSAs, consider sending out a memo informing your employees of the changes, which are designed to help reduce their out-of-pocket medical expenses.
You should also add the changes to your benefits manual so that your staff know what they are entitled to.
If you are a self-insured employer, you should ensure that your third party administrator is aware of the changes to coverages by HDHPs. As well, plan materials for employers who choose to reimburse the cost of male condoms should ask their administrator to update the plan materials for FSAs, HRAs and HSAs.
